Average mortgage rates are just below 5% at 4.99%, returning to levels seen in September.
Moneyfacts said it was unclear how long this would be sustained, as it was only in October that average rates were at 5.01%.
Before September this year, Moneyfacts data showed that the last time average rates were below 5% was before the 2022 mini Budget.
On 23 September, the day of the fiscal event, average rates were 4.71%, up from 4.29% at the start of the month. They rose to 4.83% on 29 September, and by 30 September, a week after the mini Budget, average rates had risen to 5.1%. In October, rates had gone up further to 6.03% due to market turmoil.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “Borrowers will no doubt be thrilled to see mortgage rates drop, particularly the millions due to come off a cheap fixed rate before the year is over.
“The enduring uncertainty in the aftermath of the ‘mini Budget’ led to not only a rise in rates, but lenders pulled hundreds of deals from sale. The closest comparison to such upheaval was felt due to the Covid-19 pandemic and UK lockdown.”
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She added: “Fast forwarding to the present day, mortgage rates are much lower thanks to base rate cuts and swap rate movements. However, sticky inflation makes it less likely for the Bank of England’s Monetary Policy Committee to unanimously agree on making more cuts.
“In addition, uncertainty remains surrounding what may be revealed within the Budget. That said, fixed rate mortgages do not always bend to the will of base rate cuts, and instead are more intrinsically linked with swap rates. Borrowers keen to refinance would be wise to seek advice to secure a new deal and not wait around for more rate cuts by the Bank of England.”
