Two-year fixed deals fall below five-year rates for first time since Liz Truss’s mini-budget, signalling growing confidence after the Bank of England cut interest rates
Mortgage rates on two-year deals have fallen, in a sign that recent rate chaos may be easing.
The cost of two-year mortgages has dropped below what lenders are offering on five-year deals for the first time since Liz Truss’s ill-fated mini-budget just under three years ago.
The Bank of England on Thursday cut the base interest rate 0.25 percentage points to 4 per cent.
Andrew Bailey, the governor of the Bank of England, said interest rates should not be cut too quickly
JORDAN PETTITT/PA
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Why has the Bank of England cut interest rates?
Average mortgage rates hit highest since last August in the biggest upheaval since the mini-Budget.
Borrowing costs are forecast to fall to 4%, the lowest since early 2023, despite higher inflation.
The decision to lower borrowing costs was widely expected, after inflation slowed in the year to November.
Lenders competing for business could come to the rescue of homeowners reaching the end of rock-bottom deals, say Jack Simpson and…
Markets expect interest rates to fall gradually, rather than rapidly
Monetary Policy Committee members have voted on a cut down to 4 per cent which will hamper savings but boost the mortgage market
