The average two- and three-year fixed rate has fallen by 3 basis points in the past week, while the average five-year rate is 2 basis points lower.
The latest interest rate monitoring data from Moneyfacts shows that the average two-year interest rate is now 5.65%, the three-year average is now 5.38% and the five-year average is 5.61%.
It follows multiple cuts in the past seven days, including by major brands such as Halifax, Lloyds and HSBC, as well as many specialist and buy-to-let lenders.
There have been some steeper declines within individual product categories.
The sharpest decline was the result of a three-year fixed rate of 70% on the loan-to-value ratio, which fell 9 basis points to 5.65%, while the five-year fixed rate at the same LTV fell 5 basis points to 5.37%.
There was also good news for borrowers with smaller deposits, as two-year fixes at 90% LTV fell 5 basis points to 5.89% and three-year fixes at the same LTV fell 4 basis points to 5.55%.
The average five-year equivalent also fell by 3 basis points to 5.71%.
Adam French, head of consumer at Moneyfacts, said: “Average new mortgage rates edged lower again this week, with higher loan-to-value products aimed at first-time buyers and home movers seeing some of the biggest falls.
“However, rates are still a lot higher than before the war in Iran.
“The average mortgage interest rate with a fixed term of two years was 4.83% at the beginning of March and the average interest rate with a fixed term of five years was 4.95%.
“Some of the biggest declines in average rates this week occurred on higher LTV products, as lenders compete to attract new borrowers.”
He notes that fourteen lenders cut fixed rates, while only one made a significant increase.
Several lenders also launched new products with 90% and 95% LTV in an effort to attract more first-time buyers.
French added: “It is encouraging for potential buyers that the gradual easing of mortgage prices comes at a time when both Halifax and Nationwide have reported modest month-on-month declines in house prices, with annual house price growth also slowing.
“For potential buyers in a strong financial position, the combination of weaker house price growth and improving mortgage rates could mean they are in a strong negotiating position when making a purchase.
“However, the picture is less rosy for sellers, especially in London and the South East, where affordability pressures were already weighing on demand before the economic disruption caused by the conflict with Iran fed into mortgage prices.
“Higher borrowing costs continue to have an outsized impact on higher-priced housing markets, where even small interest rate movements can cause a significant shift in monthly repayments.”
Notable changes
- Coventry Building Society – Selected fixed rates reduced by up to 12 basis points.
- Darlington Building Society – Selected fixed rates reduced by up to 30 basis points; end dates extended.
- Housing Loan Foundation – Fixed interest rate reduced by a maximum of 15 basis points; select Limited Edition products withdrawn.
- Gen H – Selected fixed rates reduced by up to 20 basis points.
- HSBC – Selected fixed rates reduced by up to 29 basis points; cashback incentives reduced.
- Halifax – Select fixed rates reduced by up to 14 basis points.
- Leeds Building Society – Selected fixed rates reduced by up to 32 basis points.
- Lloyds Bank – Selected fixed interest rates reduced by up to 12 basis points.
- Loughborough Building Society – Selected discounted variable rates increased by up to 60 basis points.
- Newcastle Building Society – Selected fixed rates reduced by up to 34 basis points; end dates extended.
- Pepper Money – Selected specialist fixed rates reduced by up to 80 basis points.
- Santander – Selected fixed rates reduced by up to 17 basis points; maximum loan size increased for a selected product.
- Scottish Building Society – Selected fixed rates increased by up to 40 basis points.
- The Cooperative Bank for Intermediaries – Fixed interest rate reduced by up to 27 basis points; end dates extended.
- Vida Homeloans – Fixed interest rate reduced by 15 basis points; end dates extended.
- West Brom Building Society – Selected fixed rates reduced by up to 33 basis points; costs reduced for selected products; end dates extended.
Product launches, withdrawals and range changes
- Buckinghamshire Building Society – New short term variable discount mortgage launched.
- Dudley Building Society – The existing range of intermediaries was expanded and made available to all intermediaries rather than introducing new products.
- Foundation Home Loans – New fixed rate range launched following withdrawal of Limited Edition products.
- Hinckley & Rugby Building Society – New Skilled Worker Visa launched discounted variable mortgages (up to 95% LTV).
- Hodge – Criteria changes in the existing range, including higher loan limits and greater availability of remortgages.
- Loughborough Building Society – New pension, near-prime, credit and credit repair products launched. For Borrowing until retirement, the variable product with a discount was withdrawn and replaced by the Borrowing until retirement range.
- Newcastle Building Society – New fixed rate mortgage launched.
- Nottingham Building Society – New Life Happens fixed rate range launched.
- Scottish Building Society – New flat rate with 95% LTV purchase only launched.
- Tipton & Coseley Building Society – New range of high income discounted variables launched.
- West Brom Building Society – New fixed rates for new builds launched.
- Yorkshire Building Society – Completion dates extended across the range.