Noteworthy Surge in Availability of 5% Deposit Mortgages Sparks Interest in Housing Market

New data has unveiled a remarkable surge in the availability of 5% deposit mortgages, reaching a level not seen in over two years. Elevated Rates for Lower Deposits: It is important to note that mortgage rates for individuals with smaller deposits generally tend to be higher compared to those with larger deposits. On average, a two-year fixed-rate for buyers with a minimum 40% deposit stands at 5.45%, while the average five-year fixed-rate remains at 5.06%, unchanged from the previous month. However, savvy buyers who work with a mortgage broker may have the opportunity to secure more favorable rates by exploring the entire market. Shifting Landscape of the Market: Recent weeks have witnessed several rate adjustments from major players such as Yorkshire Building Society, HSBC, and Barclays, following the lead of Santander and NatWest. This trend can be attributed to changing market sentiments regarding future interest rates, as indicated by swap rates. The decline in two-year and five-year swap rates from a month ago implies a potential drop in fixed mortgage rates in the near future. Predictions and Advice: Experts in the field forecast two base rate cuts within the current year, with further reductions expected in the following year. Nicholas Mendes, mortgage technical manager at John Charcol, suggests that current fixed-rate mortgage pricing incorporates these anticipated cuts but envisions the possibility of more reductions by the end of 2024. Mendes anticipates that a decrease in fixed mortgage rates could stimulate activity in the real estate market and provide financial relief to homeowners. Practical Steps: Borrowers nearing the end of their fixed-rate agreements or gearing up to purchase a property are advised to promptly explore their mortgage options. Homeowners can secure a new deal well in advance with the option to roll fees into the loan, eliminating the need for immediate out-of-pocket expenses. Potential buyers should also be cautious not to overextend their finances, especially amid fluctuating house prices and mortgage rates. Expert Assistance: To effectively compare mortgage costs and find the most suitable deal, it is recommended to consult a reputable broker. This is Money has partnered with fee-free broker L&C, offering expert mortgage advice tailored to individual needs. Utilizing tools like the best mortgage rates calculator and online Mortgage Finder, prospective home buyers can uncover the most competitive deals in the market. Given the potential changes in rates, taking swift action and enlisting the support of L&C to secure the best mortgage deal is crucial.