Lowest two-year fixed rate down from previous week; five-year fix up slightly
The most competitive mortgage deal currently available in the UK market is a two-year fixed rate product being offered by Lloyds Bank for borrowers with a 40% deposit.
According to Rightmove’s latest weekly mortgage tracker, the lowest two-year fixed rate on offer has fallen to 3.86%, marking a 0.09 percentage point drop from the previous week and a 0.60 percentage point decline year-on-year. Meanwhile, the lowest five-year fixed rate has edged up slightly to 3.96%, a weekly rise of 0.04 percentage points.
For borrowers with smaller deposits, rate changes remain modest. The average two-year fixed rate for buyers with a 5% deposit dropped by 0.03 percentage points over the week to 5.67%. The average five-year fixed rate for this group also decreased by 0.03 points to 5.37%.
At the 90% loan-to-value (LTV) tier, average two-year fixed rates slipped to 5.19%, down 0.04 percentage points. Five-year deals at the same LTV dropped to 4.91%.
Among those with mid-range deposits (15-25%), rates remained broadly flat. The average two-year fixed rate at 85% LTV declined slightly to 4.87%, while the five-year option held steady at 4.72%. At 75% LTV, the two-year average dipped by 0.02 points to 4.62%, while the five-year rate nudged up to 4.53%.
For borrowers with 40% deposits, the average two-year fixed rate fell to 4.24%, while the five-year average climbed to 4.20%. These figures, Rightmove noted, represent a modest weekly movement but reflect a broader downward trend over the past year.
“Average mortgage rates at the top-end of the market have fallen more quickly than for those with the smallest deposits over the past year,” said Matt Smith, mortgage expert at Rightmove. “Someone with a 10% deposit is still looking at an average five-year mortgage rate of 4.91%, only slightly down from 4.99% at this time last year.
“By contrast, today someone with a 40% deposit is now looking at an average five-year mortgage rate of 4.20%, down from 4.36% – and we are still seeing some products below the 4% mark in this bracket.
“So, while borrowing power has improved for first-time buyers, higher, and slower falling, mortgage rates for those with smaller deposits is still stretching affordability.”
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