The average five-year fixed-rate homeowner mortgage is edging closer to falling back below the six per cent mark, according to figures from a financial information website.
Across all deposit sizes on the market, the average five-year fixed-rate homeowner mortgage is 6.03 per cent, edging down from 6.04 per cent on Tuesday, Moneyfacts said.
The last time the average five-year fixed deal was below six per cent was on July 3, when it stood at 5.97 per cent.
The average two-year fixed residential mortgage rate is 6.53 per cent, down from an average rate of 6.54 per cent on Tuesday.
Some major mortgage lenders have been cutting rates this week, with the Bank of England base rate being left unchanged at 5.25 per cent last Thursday.
Mortgage borrowers with chunkier deposits can choose from five-year fixes at rates below five per cent.
As we approach the final quarter of this year, we are likely to see continued stability in the mortgage market persist with rates continuing to gradually drop and more lenders likely to offer sub five per cent deals
Matt Smith, Rightmove
On Wednesday, HSBC UK reduced a selection of mortgage rates by up to 0.16 percentage points.
Among the deals, it is offering borrowers with a 40 per cent deposit a five-year fixed-rate mortgage at 4.93 per cent, with a £999 fee, which is 0.96 percentage points lower than in July.
It has also added £350 cashback to selected five-year fixed rates for those moving home.
An HSBC UK spokesperson said: “Following review, we are pleased to announce more cuts to mortgage rates across our residential mortgage range for new and existing customers.”
The spokesperson added: “There are a number of factors taken into account when we set rates, including swap rates and market conditions.”
On Tuesday, Santander UK reduced selected mortgage rates by up to 0.50 percentage points.
The new deals include a five-year fixed rate at 4.95 per cent with a £999 product fee for people with a 40 per cent deposit, down from 5.10 per cent previously.
Matt Smith, a mortgage expert at property website Rightmove, said: “Following the positive news on inflation and the Bank’s decision to hold the base rate, we have seen swap rates, the underlying costs of fixed-rate mortgages, stabilise.
“The important takeaway from last week for those looking to take out a mortgage soon is that the expectation that the base rate has now peaked is now the predominant view of the market, although there is still a sizeable but decreasing risk that we may see one more increase this winter.
“As we approach the final quarter of this year, we are likely to see continued stability in the mortgage market persist with rates continuing to gradually drop and more lenders likely to offer sub five per cent deals.
“After what has been a rollercoaster 12 months for mortgage rates since the mini-budget, this will be welcome respite for home movers after what continues to be a difficult adjustment from the prolonged period of ultra-low rates.”