The average mortgage rate of two years has dropped 5% for the first time since the mini-budget liz truss.
The interest rate billed on a two -year -old fixed mortgage agreement is now 4.99%, according to the financial information company Moneyfacts.
This means that there are mortgage products of two more expensive and more expensive on the market, but the average fell to a hollow of almost three years.
Not since September 2022, the average was at this level, before the former Prime Minister Liz Truss announced his so-called mini-budget.
The program of unlikely expenses and tax reductions, carried out without the comment of the independent guard dog, the office of budget responsibility, led to a sharp increase in the cost of the government’s loan and required intervention by the monetary regulator of the Bank of England to prevent a collapse of pension funds.
It was also a key reason for the reason up to 6% For a typical two-year agreement in the weeks that followed the mini-budget.
For what?
The mortgage loan rate fell on Wednesday while the basic interest rate set by the Bank of England – was Cut last week at 4%. The reduction made less expensive loans, because the signs of an economy in difficulty were obvious to central bankers and despite inflation forecasts.
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The Bank of England reduces the interest rate
It is the expectation of a high price increase that prevented mortgage rates from lowering more. The bank increased interest rates and maintained them relatively high, as inflation should increase more quickly due to bad harvests and an increase in employers’ costs, making goods more expensive.
The group behind the figures, Moneyfacts, said: “Although the cost of the loan is still well above the rock rates of years immediately preceding this budgetary event, this step shows that lenders are in competition more aggressively for business.”
In turn, mortgage providers hesitate to offer cheaper products.
A new drop in the basic interest rate is expected before the end of 2025, according to data from London Stock Exchange Group (LSEG). Merchants are currently betting that the rate will be increased to 3.75% in December.
This expectation can influence the prices that lenders offer.