Average two-year mortgage rate dips below 5% for first time since mini-budget
Moneyfacts said the average two-year fixed homeowner mortgage rate on Wednesday morning was 4.99%. This was down from 5.00% the previous working day.
It marked the first time since September 29 2022 that the rate was below 5%, when it stood at 4.87%.
Adam French, head of news at Moneyfactscompare.co.uk said the move 'is a symbolic turning point'.
He continued: 'While the cost of borrowing is still well above the rock-bottom rates of the years immediately preceding that fiscal event, this milestone shows lenders are competing more aggressively for business.
'However, while mortgage rates have followed the mood music set by successive cuts to the Bank of England base rate, homeowners and first-time buyers may have to wait longer for more substantial cuts.
Inflation is forecast to spike at 4% in the autumn and not return to its 2% target until 2027 or beyond which is likely to mean the base rate will hold around its current level for longer.'
Ms Truss's chancellor Kwasi Kwarteng revealed a spending review in 2022, which included £45bn in unfunded tax cuts and caused turmoil in the UK financial markets.
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