Mortgage rates have decreased as a result of increased competition between lenders, and predictions that interest rates will soon peak.
Moneyfacts, a data firm, found that the rate on two and five-year fixed mortgages have gone down from 6.47% and 6.32% at the start of November to 5.44% and 5.20% at the start of this month.
Lloyds Banking Group and Virgin Money are both offering ten-year fixes at 3.99%, bringing the cost of the cheapest mortgage to begin with a '3' for the first time since September.
Furthermore, Cumberland Building Society's previous low rate of 4.17% has been undercut by Platform, part of the Co-op Bank, which launched a five-year fix at 4.09%.
The UK has seen a drop in mortgage rates due to increased competition between various lenders and the expectation that interest rates will soon peak.
Data firm Moneyfacts reports that the average rate on two and five-year fixed mortgages has fallen from 6.47% and 6.32% at the start of November to 5.44% and 5.20% at the beginning of this month.
Lloyds Banking Group and Virgin Money are offering ten-year fixes at 3.99%, the lowest mortgage rate starting with the '3' since September.
Furthermore, Platform, part of the Co-op Bank, launched a five-year fix at 4.09%, undercutting Cumberland Building Society's previous low rate of 4.17%.
While rates have fallen, the Bank of England's base rate is currently at 4% after its tenth successive increase last Thursday, which makes this the highest rate in 14 years.
The Times suggests that the reason for the fall in rates is a price war between companies: "Yet a price war between lenders and the expectation that interest rates will soon peak has brought down the cost of fixed deals.
" However, the Guardian focuses more on the recent hike in interest rates: "It is clearly concerning news for homeowners, who will have to pay back more on their mortgages.
" Both articles, however, agree that the decrease in rates is significant.
The Sun reports that the rate drop is due to the Bank of England's decision to increase interest rates: "The Bank of England is expected to keep rates at the 4% level for the immediate future.
" Their article claims that the rate drop will continue: "Leading lenders are quashing large mortgage hikes in a bid to keep their share of the market."
Overall, various sources agree that mortgage rates have dropped in the UK, largely due to factors such as increased competition between lenders and expectations that interest rates will soon hit their peak.
The decrease is a welcome development for those seeking to borrow money to buy a home, though the Bank of England's recent interest rate hike makes this a cautious market.