5% mortgage rates (again)

[Twiglets1]

Following on from the previous two of these threads both with 6% mortgage rates in the title, I think it's more realistic to return to 5% for this one.

According to this Rightmove article, the current average mortgage rate for a five-year fixed rate mortgage is 4.84%, up from 4.85% last week. The current average rate for a two-year fixed rate mortgage is 5.23%, which is unchanged from last week. The lowest available five-year fixed rate is 4.13%, and the lowest available two-year fixed rate is 4.46% – both unchanged from last week.

On 27th March, the average 5 year fixed rate mortgage for someone with a 60% LTV was 4.35%.
For someone with a 75% LTV it was 4.72% whereas 80% was 4.79%.

For someone with a 90% LTV it was 4.98% whereas 95% was 5.47%.

Two year fixed rate mortgages are slightly higher.

https://www.rightmove.co.uk/news/articles/property-news/current-uk-mortgage-rates/

https://uk.finance.yahoo.com/news/uk-gilt-yields-us-treasuries-trump-tariffs-trade-war-124529220.html

Oh they can still cut short term, but it will be because they’re forced due to economic turmoil not because inflation is under control. That won’t necessarily be reflected in mortgage rates as credit supply restricts.

Cutting is highly inflationary in itself with yields rising, without taking into account the inflationary pressures of tariffs etc.

'Oh they can still cut short term, but it will be because they’re forced due to economic turmoil not because inflation is under control.'

I agree. I definitely don't think inflation is conquered. I think it will inevitably get worse longer term, assisted by central bank actions.

Mortgage rates drop below 4% as more interest rate cuts predicted for this year

The lowest mortgage rates have dropped below 4 per cent in what has been described as a 'golden window of opportunity' for homeowners.
Markets are now expecting there to be four Bank of England interest rate cuts by the end of the year. This would see the base rate fall from 4.5 per cent to 3.5 per cent, amid fears that a trade war could damage economic growth.

Prior to Trump's so-called 'liberation day' last week, markets were forecasting just two further interest rate cuts this year.

The shift in interest rate expectations is expected to feed through into Sonia swaps, the inter-bank lending rate which forecasts where mortgage rates will be in two or five years. Lenders use this to determine fixed-rate mortgage pricing.
On 9 April, five-year swaps are at 3.76 per cent and two-year swaps were at 3.74 per cent. At the start of last week these were both above 4 per cent.

Coventry Building Society has also released a new best-buy two-year fix below 4 per cent. Its 3.89 per cent two-year fix comes with a £999 fee. On a £200,000 mortgage being repaid over 25 years, that would equate to paying £1,044 a month. The deal is available to those buying a property with at least a 35 per cent deposit.

There is also a five-year fixed rate option at 4.03 per cent, with a £999 fee. The next best deal on the market is offered by Nationwide at 4.07 per cent.

Coventry's cuts follow on from MPowered Mortgages, which also cut rates across all of its products yesterday.

https://www.thisismoney.co.uk/money/mortgageshome/article-14587517/Mortgage-rates-drop-4-rate-cuts-predicted-year.html

Ah yes,

@XVGN Yes, DH is quite interesting with his forecasts.

https://inews.co.uk/opinion/if-the-bank-of-england-raise-interest-rates-starmer-and-reeves-must-do-the-unthinkable-3627841?srsltid=AfmBOop7bGeqj2Ip6oGZhl0OoUiNeSiveLGrmTmigber_3DaY7FpodXR

The treasury market dictates monetary policy not politicians

Major bank predicts four interest rate cuts

The Bank of England is set to meet on 8 May and interest rates are widely expected to be cut 25 basis points down to 4.25 per cent - but homeowners and businesses might be pleased to know the drop won’t stop there.

While the BoE has pledged a gradual approach to cutting rates, in fear of letting inflation run riot again as it did two years ago, many experts are now foreseeing at least a further two cuts in 2025 - and one, Barclays, believes the UK may now see four consecutive cuts to the interest rate.

That would take the base rate down to 3.5 per cent, a level it has not been at for more than two years, since January 2023.

Research undertaken by Barclays analysts expect the BoE’s Monetary Policy Committee (MPC) to vote either 8-1 or 9-0 in favour of a one-step cut in May. They expect further 25 basis point cuts in June, August and September down to 3.5 per cent base rate.

www.independent.co.uk/news/business/bank-of-england-interest-rates-cut-barclays-inflation-b2743167.html

UK interest rates cut to 4.25% by Bank of England

Interest rates have been cut for the fourth time in the past year after the Bank of England reduced them to 4.25% from 4.5%.

Bank governor Andrew Bailey said the slowdown in inflation was behind the cut, but warned recent weeks had shown "how unpredictable the global economy can be" with the US introducing wide-ranging tariffs.

The Bank considered a bigger cut to 4%, as it assessed how the global trade war would hit economic growth, but also lower energy prices and so inflation.

The decision comes as details of a tariff deal between the UK and US are set to be announced later on Thursday. Currently, most goods imported from the UK to the US face a blanket 10% tariff, with higher import taxes on steel and cars.

Speaking at a news conference following the Bank's decision, Mr Bailey said it was "excellent that the UK is leading the way" with an expected deal with the US, which would "help to reduce uncertainty".

Future UK rate cuts are likely to be "gradual and careful", Mr Bailey said, as minutes of the Bank's meeting showed that there was a three-way split among policymakers.

Of the nine members on the Bank's rate-setting committee, five members voted to cut rates to 4.25%, two voted in favour of a larger reduction to 4% and two voted for no change.

https://www.bbc.co.uk/news/articles/cwyqyp7xp12o

Yields on the rise once again

https://uk.finance.yahoo.com/news/bank-england-interest-rates-higher-114638664.html

As I have previously explained

https://inews.co.uk/inews-lifestyle/money/property-and-mortgages/tsb-ups-mortgage-rates-lenders-follow-3695238?srsltid=AfmBOoqcNjWw3sJZXNllCAktqo4Jnd_J31MZSM1qOm-yqjkwsZTIfIkD

well I tried to warn everyone

https://www.independent.co.uk/voices/interest-rates-inflation-mortgages-housing-market-b2755950.html

It’s behind a paywall so unless you copy & paste relevant parts of the article, we can’t read it.

If you’re reading the independent article on an iPhone you can click the three AAA and select Show Reader and bypass the paywall that way.

Thanks for that. Initially it wasn’t working until I realized it only work with Safari.
So if your default browser is not Safari, you have to copy and paste the link.

Santander cuts selected mortgage rates, with new pricing from 3.55%

theintermediary.co.uk/2025/11/santander-cuts-selected-mortgage-rates-with-new-pricing-from-3-55/

Gosh that was a blast from the past re this thread… sounds a good deal @Didyousaysomethingdarling