According to the latest data from financial experts Moneyfacts, the average two-year fixed-rate mortgage has dropped to 5.56%, while the average five-year fixed-rate deal now sits at 5.20%. This means borrowers could save hundreds of pounds a year on their repayments.

This drop in rates is a welcome relief after the turmoil of the mini-Budget in 2022, which saw mortgage rates skyrocket.

Here’s a breakdown of the average mortgage rates:

Mortgage Type	Average Rate (September 2023)
Two-Year Fixed Rate	5.56%
Five-Year Fixed Rate	5.20%

However, it’s not all plain sailing for those looking to get a foot on the property ladder or remortgage. While rates are becoming more attractive, the number of mortgage deals available has shrunk.

Moneyfacts’ data reveals that the number of mortgage products on the market fell from 6,657 in August to 6,523 at the start of September. This decrease is partly due to lenders adjusting their offerings in response to the Bank of England’s recent interest rate cut.

The biggest drop in product choice has been for mortgages with 80% and 85% loan-to-value ratios, which could make things tougher for buyers with smaller deposits.

What does this mean for you?

• If you’re considering buying a home or remortgaging, now could be a good time to act and secure a favourable rate.
• Don’t assume all lenders are the same. Shop around and compare deals from different providers to find the best one for your circumstances.
• Seeking advice from a mortgage broker is highly recommended. They can help navigate the complexities of the market and find a mortgage that suits your needs.