Editor's note: This brief was summarised by The Property AI Newsroom from a report by Property Industry Eye. Read the original article for full details.
Two-Year Fixed Mortgage Rates Record Notable Drop
The average two-year fixed mortgage rate in the UK dropped by 0.10 percentage points to 5.68% in May, marking the largest monthly fall in more than a year. At the same time, the average five-year fixed rate also declined, reaching 5.63%, according to the latest Moneyfacts UK Mortgage Trends Treasury Report.
Mortgage product availability has also improved, with the number of residential mortgage products increasing by almost 350 during May. This rise has pushed the total number of available products above 7,000 for the first time since March. The report indicates that lenders are continuing to cut fixed-rate deals and reprice their ranges in response to changing market conditions.
The figures suggest that competition between lenders is increasing, with providers adjusting pricing as swap rates fluctuate and expectations for future interest rates evolve. The average shelf-life of a mortgage deal now stands at 15 days, which is the same as the previous month and a significant improvement compared to just eight days at the start of April.
For letting agents and inventory clerks, these changes in mortgage rates and product availability may influence landlord and tenant activity, as well as the broader UK property market. The report also notes that the two- and five-year fixed mortgage rates have been inverted for three months, with the five-year rate priced below the two-year rate.
The data highlights ongoing volatility in the mortgage market, with fixed rates displaying mixed movements as the future path of interest rates remains uncertain. The report also references that approximately 1.8 million fixed rate mortgages are due to end in 2026, according to UK Finance.
Source: Property Industry Eye