Average mortgage rates at their lowest in over six months

The start of the new year sees average rates fall while product availability grows.

The mortgage market made a positive start to 2024, with average two and five-year fixed rates continuing to fall in January for the fifth consecutive month.

With the average rate for a two-year fixed mortgage charging 5.93% at the start of the month, and the average five-year deal sitting at 5.55%, these rates are at their lowest in over six months.

Graph: Average mortgage rates continued to fall at the start of January 2024.

“The consecutive reductions to the overall average two- and five-year fixed mortgage rates will be of great relief for borrowers looking to refinance this year,” said Rachel Springall, Finance Expert at Moneyfactscompare.co.uk.

However, citing “big expectations for fixed mortgage rates to fall in the coming weeks”, Springall added that some borrowers may be waiting for the right time before changing their deal or buying a new property.

Nevertheless, those currently looking for a new mortgage have an increased number of deals to consider, as overall product availability rose month-on-month for the sixth consecutive time.

With 5,899 options to choose from at the start of January, the mortgage market continues to see its highest number of products available in over 15 years; the last time there were more deals available was in March 2008.

Graph: The number of mortgage products available continued to rise at the start of January 2024.

Sub 4% mortgages

Although average rates remain significantly above 5.00%, there are plenty of mortgages available charging below this threshold. Recent weeks have even seen a number of sub 4% deals return to the market, as lenders made cuts to their ranges.

Santander, for instance, offers most remortgage borrowers the lowest five-year fixed deal at 3.89%. Meanwhile, the majority of homemovers can find the lowest five-year fixed rate from Virgin Money, which offers a mortgage charging 3.92%.

However, if you’re looking to borrow a minimum of £750,000, The Co-operative Bank and The Co-operative Bank for Intermediaries have five-year fixed deals available that come with lower rates.

Other prominent high street brands such as HSBC, first direct and Yorkshire Building Society also offer mortgages charging below 4%. More information on these deals is available in our charts.

Otherwise, for help navigating the mortgage market, consider speaking with a broker.

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