UK mortgage rates drop below 5% for first time since September

Moneyfactscompare.co.uk said its average mortgage rate stood at 4.99% on November 3, the same level seen in early September (Joe Giddens/PA Archive) Joe Giddens

Average mortgage rates in the UK have fallen below 5 percent for the first time since September. The rate stood at 4.99 percent on November 3, down from 5.01 percent at the beginning of October, according to financial information website Moneyfactscompare.co.uk.

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.» She added: «It is a notable milestone to see the Moneyfacts average mortgage rate drop below 5%, although it remains uncertain on how long this can be sustained.»

The drop marks a significant shift from the turmoil following the mini-Budget. Springall noted that uncertainty after the mini-Budget led to rising rates and lenders pulling hundreds of deals from sale. Mortgage rates are now much lower thanks to base rate cuts and swap rate movements.

Mary-Lou Press, president of NAEA Propertymark, welcomed the development: «It's extremely positive to see a far more competitive lending market than only 12 months back.» She added: «Consumers have faced a doubled-sided challenge in recent years with elevated inflation and heightened base rates.»

The timing is critical as the Bank of England prepares its next base rate decision on Thursday. Major banks including Barclays and Goldman Sachs now predict the central bank will cut interest rates to 3.75 percent. Press emphasized: «It will be a case of all eyes on the Bank of England on Thursday, as the next base rate decision is made.»

Note: This article was created with Artificial Intelligence (AI).