Average rates on two and five-year mortgage deals have fallen to their lowest levels since the start of September 2022, before the Lizz Truss ‘mini-Budget’.

This is according to new data from Moneyfacts, which showed that average rates on two and five-year fixes fell by 0.08% to 4.86%, and by 0.10% to 4.91%, respectively. This marks the first time the average five-year fixed rate has dropped below 5% since May 2023.

Moneyfacts’ latest UK Mortgage Trends Treasury Report also revealed that product choice in the mortgage market has reached 7,054 options at the start of December, close to a record high.

The group suggested that a drive to support borrowers seeking higher loan-to-value (LTV) deals has been evident over the past 12 months, after figures showed year-on-year deals at 95% LTV increased by 111 and those at 90% LTV rose by 155. By comparison, no other LTV tier has risen by more than 100 deals year-on-year.

This mortgage activity also led to a fall in the average shelf-life of a mortgage to 18 days.

“Mortgage rates continue on the downward trend and November was particularly fruitful for fixed rate cuts,” said Moneyfacts finance expert, Rachel Springall.

“The repricing by lenders led to the average five-year fixed rate dropping below 5% for the first time in over two years and sits at its lowest point since before the ‘mini-Budget’ in September 2022, alongside its two-year counterpart.”

Springall added that the improvement in cost and product availability across the mortgage market “paints a positive picture” for borrowers heading towards the New Year.

“This year has not been without a few ups and downs for rate moves and product availability, but all signs are looking encouraging for the mortgage market to thrive moving into 2026,” she continued.

“The Budget has been and gone, expectations for another base rate cut are high, and muted house price growth as a combination can lead to optimistic sentiment among buyers.

“However, those who locked into a cheap fixed deal five years ago will need to accept that they will have to cover higher repayments, with the Bank of England expecting 3.9 million households will refinance onto higher rates over the next three years. Seeking advice in the first instance before buying or remortgaging will be essential to help borrowers navigate the mortgage maze.”

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