Two-year fixes drop below 5%
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The average two-year fixed rate deal has fallen below 5% for the first time since June, data from Moneyfacts reveals.
The average two-year fix is now 4.99%, having risen since June 23 to a peak of 5.21% by the end of July.
Yet three-year fixes have gone the other way, increasing over recent months to a current average of 5.58%.
A spokeswoman for Moneyfacts.co.uk says: “Falling rates on popular two-year fixed rate deals, occurring against a backdrop of lenders raising the maximum LTV on their most competitive deals suggests that competition is increasing.
“Lenders have become accustomed to the post banking collapse world and appear to finally be relaxing their credit criteria while remaining within a regulated framework.
“Swap rates have been falling over the last few weeks, but mortgage rates on medium-term deals are yet to follow suit.
“Borrowers will be hoping the easing of credit criteria continues and that lenders will start to reduce the large margin for risk they have been taking over the last year.”
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