The pace of interest rate cuts by mortgage providers is slowing and this trend may continue, according to the latest interest rate monitor from Moneyfacts.
According to Moneyfacts, average two- and five-year fixed interest rates fell to 4.77% and 4.86%, each down just 1 basis point since last week.
Last week the average home loan with a fixed interest rate of two years decreased by 2 basis points to 4.78%while the typical five-year interest rate fell 1 basis point to 4.87%.
The largest cuts occurred on the two-year fixes to an LTV of 65%, which were reduced by 5 basis points to an average rate of 4.85%.
But prices have risen in many other categories, including two-year fixes to 95% LTV (up 4 basis points to 5.3%) and three-year fixes to 95% LTV (up 5 basis points to 5.32%).
Moneyfacts finance expert Rachel Springall said: “Fixed rate cuts took precedence this week, which will be great news for potential borrowers, but there is a chance the path for significant cuts could narrow.
“High Street banks have further reduced their range, including Barclays, Lloyds Bank, NatWest and Santander. The busy market led to some notable cuts at Building Societies.
“With lenders working to pass on cuts in response to lower swap rates in previous weeks, this may not be as sustainable going forward. This week’s inflation statistics and increased global economic turmoil have impacted swap rates, with two- and five-year swaps currently trending near their highest levels in 30 days.
“Lenders will no doubt be watching the markets closely to see if they need to adjust their repricing plans in the coming weeks, or if it is just a short-term response that may settle down.”
Notable mortgage cuts this week include some cuts from Progressive Building Society to 35 basis points and Scottish Building Society to 25 basis points.