Mortgage rates are finally falling, making it cheaper to buy your dream home.

Just a month after the Bank of England slashed interest rates to 5%, we’re seeing some relief in the mortgage market. The average interest rate you’ll pay on a standard variable rate mortgage (SVR) has dipped below 8% for the first time since last summer, down to 7.99%.

And it’s not just SVRs; those fixed-rate deals are looking more tempting too:

• Two-year fixed-rate mortgages: Now averaging 5.56%, down from 5.76% in March.
• Five-year fixed-rate mortgages: Down to 5.20% from 5.34% in March.
• Ten-year fixed-rate mortgages: Dropped to 5.63% from 5.98% in March.

To put this into perspective, back in September 2022, two and five-year fixed rates were both over 6%!

Experts say these falling rates are down to a combination of things:

• The Bank of England cutting the base rate, making it cheaper for banks to lend money.
• A more stable “swap rate” market (that’s the behind-the-scenes stuff that influences fixed-rate deals).
• Lenders are in a battle to attract new customers, leading them to cut rates and offer better deals.

What does this mean for you?

• First-time buyers might find it a bit easier to get on the property ladder.
• Existing homeowners coming to the end of their fixed-rate deals could save money by remortgaging.

Rachel Springall, a financial expert at Moneyfacts, says borrowers should shop around for the best deals and seek advice if they’re unsure about the best option. “It would be understandable for some to adopt a ‘wait and see’ approach, hoping rates will come down by bigger margins,” she says.

But remember, even though rates are falling, it’s still essential to budget carefully and make sure you can afford your mortgage payments if rates rise again in the future.