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Average mortgage rates fall for first time in months | Business news

Average mortgage rates have fallen for the first time in months.

Two- and five-year fixed interest rates have fallen, according to data from financial information company Moneyfacts.

The average rate on a two-year fixed deal is now 6.79%, down from 6.81% on Wednesday, while the average five-year rate fell to 6.31%, down from 6.33% the previous day. The majority of UK mortgage holders are on fixed rate deals.

Prices have not fallen since the spring.

is behind the reduction A surprising drop in the rate of inflationwhich led to lower interest rate forecasts.

It is now expected that the Bank of England will need to raise key interest rates less to bring inflation back to its 2% target.

Before the inflation announcement, the Bank’s base interest rate was expected to exceed 6% but is now estimated to reach 5.75%.

The lower expected rate is now being priced by mortgage lenders.

Overall, mortgage bills for anyone who recently agreed to a new fixed rate are still significantly higher than the years of extremely low interest rates. Less than two years ago, in October 2021, the average rate on a five-year contract was just 2.55%.

UK Finance, the banking industry trade body, said more than 2.4 million fixed-rate deals were set to expire between the summer and the end of 2024.

Source by [Sky News]



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