Moneyfacts UK Mortgage Trends Treasury Report data reveals the average rates on all loan-to-value tiers across two- and five-year fixed mortgages fell for a fourth consecutive month. Average rates on a two- and five-year fixed mortgage overall are at a six-month low.
- Average fixed mortgage rates across all LTV tiers on two- and five-year fixed rate deals fell for a fourth consecutive month.
- The overall average two- and five-year fixed rates fell between the start of November and the start of December, to 6.04% and 5.65% respectively, now at their lowest levels since June 2023. The average two-year fixed rate stands 0.39% higher than the average five-year equivalent, a narrower gap than the 0.43% difference last month.
- The average ‘revert to’ rate or Standard Variable Rate (SVR) remained unchanged. At 8.19%, this rate is at the highest level on Moneyfacts’ electronic records (starting July 2007).
- The average two-year tracker variable mortgage rate rose month-on-month to stand at 6.16%.
- Product choice overall rose month-on-month, for a fifth consecutive month, to 5,694 options, the highest level of availability in over 15 years. The last time there were more deals available was March 2008 (6,192 products).
- The average shelf-life of a mortgage product fell to 17 days, a sign of lenders vigorously repricing as the year end approaches.
| Mortgage market analysis | ||||||
| Dec-21 | Dec-22 | Jun-23 | Nov-23 | Dec-23 | ||
| Fixed and variable rate products | Total product count – all LTVs | 5,315 | 3,730 | 4,967 | 5,678 | 5,694 |
| Product count – 95% LTV | 353 | 144 | 229 | 254 | 253 | |
| Product count – 90% LTV | 706 | 457 | 636 | 709 | 718 | |
| Product count – 60% LTV | 584 | 500 | 653 | 619 | 623 | |
| All products | Shelf-life (days) | 26 | 17 | 22 | 20 | 17 |
| All LTVs | Average two-year fixed rate | 2.34% | 6.01% | 5.49% | 6.29% | 6.04% |
| Average five-year fixed rate | 2.64% | 5.80% | 5.17% | 5.86% | 5.65% | |
| 95% LTV | Average two-year fixed rate | 3.09% | 6.26% | 6.06% | 6.55% | 6.34% |
| Average five-year fixed rate | 3.39% | 5.95% | 5.43% | 5.93% | 5.73% | |
| 90% LTV | Average two-year fixed rate | 2.51% | 6.07% | 5.66% | 6.25% | 6.01% |
| Average five-year fixed rate | 2.95% | 5.76% | 5.23% | 5.91% | 5.71% | |
| 60% LTV | Average two-year fixed rate | 1.66% | 5.73% | 5.11% | 5.94% | 5.59% |
| Average five-year fixed rate | 1.93% | 5.55% | 4.85% | 5.47% | 5.20% | |
| All LTVs | Standard Variable Rate (SVR) | 4.40% | 6.40% | 7.52% | 8.19% | 8.19% |
| All LTVs | Average two-year tracker rate | 1.58% | 4.03% | 5.32% | 6.15% | 6.16% |
| Data shown is as at the first available day of the month, unless stated otherwise. | ||||||
| Source: Moneyfacts Treasury Reports | ||||||
Rachel Springall, Finance Expert at Moneyfacts, said:
“Fixed mortgage rates have continued to drop across all loan-to-values (LTVs), month-on-month, on two- and five-year fixed terms. These falls will come as good news to borrowers across the spectrum, including first-time buyers. Those borrowers with small deposits will find that average rates are now down considerably from just a few months ago, with the average two-year fixed rate at 90% and 95% LTV resting at 6.01% and 6.34% respectively, down from 6.81% and 7.10% in August 2023, which was the highest monthly point in 2023. This could improve the potential mortgage affordability of would-be buyers or those looking to remortgage with limited equity.
The choice of mortgage deals continued to rise month-on-month, including deals for borrowers with a smaller deposit or equity. Mortgages in the 90% LTV sector are in abundance, now with over 700 deals for borrowers to choose from, it is the highest count seen on our records in over a year (February 2022 – 735). This is promising as just one year ago there were less than 500 deals (December 2022 – 457). Those borrowers who can only stretch their deposit to 5% will find over 250 deals to choose from, compared to just 144 deals a year ago. It would be encouraging to see more appetite from lenders within the 95% LTV sector moving into 2024, particularly as the Mortgage Guarantee Scheme has been extended to the end of June 2025.
The incentive to refinance may well be in the mindset for many borrowers as we approach the new year, but for those sitting on a standard variable rate (SVR), this may well be an even more pressing situation. Those coming off a two-year fixed will find the average rate is 3.70% higher on average (December 2021 versus December 2023) and that the average SVR is above 8%. Borrowers may then not be willing to wait for fixed rates to fall further and wish to lock into a fixed rate now for peace of mind. Lenders will no doubt be working hard to meet their end-of-year targets right now, indeed the average shelf life of a mortgage has fallen to 17 days, down from 20 days, so hopefully such vigorous repricing will result in better deals for borrowers desperate to refinance.”
