New research by L&C Mortgages has found that the lowest mortgage rates are now on par or lower than before they accelerated in September 2022 following Liz Truss’ mini-budget.
They examined the average of the top ten lenders’ best rates currently on offer to homebuyers and remortgage borrowers on the morning of Truss’ budget, one month after and where they are now.
After only a month rates had jumped sharply. As interest rate forecasts have improved in recent months, rates have now started to ease. The lowest two-year fixed rate for homebuyers are now more than two percentage points lower than their October 2022 spike, falling from 6.16% to 4.13%.
This is not the case for buyers using a 10% deposit, as rates remain slightly higher than before the mini-budget. For instance, the average two year fixed rate at 90% LTV is now 5.06% compared to 4.57% in September 2022.
L&C associate director David Hollingworth said: “The mortgage market has seen bouts of huge volatility in the last two years so it’s encouraging for borrowers to see that rates are now in a much better place. Even though the base rate is more than twice its level prior to the mini-budget, mortgage rates are largely back to where they were.”
He added: “More importantly the market has shown much more stability and is a world away from the skyrocketing rates post mini-budget, allowing homemovers and remortgage borrowers to look ahead with greater certainty.”