Wed, 13 Aug 2025

Wed, 13 Aug 2025 Average mortgage rates below 5% for first time since Truss budget

Average two-year mortgage rates have fallen to 4.99%, the lowest point since September 2022.

* The average two-year mortgage rate has dropped to 4.99%, a new low since Liz Truss's mini-budget in September 2022.
* Moneyfacts describes this as a "symbolic turning point" for homebuyers and suggests lenders are becoming more aggressive in their pricing.
* Despite this, interest rates are unlikely to fall substantially further, according to a Moneyfacts spokesperson.
* Hundreds of thousands of borrowers will re-mortgage this year, with 1.6 million fixed rate deals set to expire by the end of 2025.
* Mortgage rates remain higher than pre-mini-budget levels and are "well above rock-bottom rates".
* The UK mortgage market is currently "ultra-competitive" with lenders offering extremely thin margins.
* Knight Frank Finance predicts interest rates will continue to fall over the autumn, but the future remains uncertain.
* Inflation is forecast to spike to 4% in September before falling back to 2% in 2027.
* Average house prices are close to a record high at £298,237, but mortgage rates and wages are still improving affordability.
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