Money Wellness
Image of a chalkboard with a graph rising upwards and a house sat on top with 'mortgage rates' underlined
category iconcost of living
category iconHousing
calendar icon20 Jul 2023

A glimmer of hope for homeowners as mortgage rates fall for the first time in months

Lower than expected inflation has resulted in the price of mortgages falling slightly for the first time in months, leading to hope that home loan rates could have peaked.

The average rate for a two-year fixed rate has dipped to 6.79% from 6.81% yesterday, while the five-year average is 6.31% - a decrease from 6.55%, according to MoneyFacts.

The drop follows yesterday’s announcement of lower-than-expected inflation figures which fell to 7.9% from a high of 8.7% in May.

However, homeowners shouldn’t expect an immediate reduction in mortgage deals.

In the short-term the best that can be expected is the cost of borrowing stabilises and doesn’t keep increasing as it has done for the past 18 months.

For the 400,000+ people expected to move off existing fixed deals between July and September, the debate now is whether the time is right to secure another fixed rate deal or wait to see if rates fall further.

 

Struggling with mortgage repayments?

Are you struggling to pay your mortgage? Is worrying about falling behind on mortgage payments keeping you awake at night? Or has coming to the end of your fixed rate deal pushed you into debt?

You can get more helpful information from one of our guides:

How to manage rising rents and mortgage interest rates (moneywellness.com)

https://www.moneywellness.com/guide/support-for-mortgage-interest

https://www.moneywellness.com/guide/what-you-should-do-if-you-fall-behind-with-your-mortgage-payments

Avatar of Caroline Chell

Caroline Chell

Caroline has worked in financial communications for more than 10 years, writing content on subjects such as pensions, mortgages, loans and credit cards, as well as stockbroking and investment advice.

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