Average mortgage rates remained relatively unchanged since last week, with most adjustments on products for people with small deposits and equity, data from a property portal firm found.
The Rightmove weekly mortgage tracker showed that this week, the typical two-year fixed rate across all loan-to-value (LTV) tiers was 5.03%, 0.02% higher than last week and 0.13% lower than the start of 2024.
The average five-year fixed rate was 4.8%, the same as last week and 0.05% down from a year earlier.
The lowest available rate as of 10 January was 4.2% for a two-year fix and 4.07% for a five-year fix. This was also fairly similar to last week, with just a 0.01% change to the cheapest two-year fixed rate. The cheapest five-year fix was unchanged.
Bigger changes at higher LTVs
Rightmove’s data suggested that although the week-on-week changes were small, there were more adjustments at high LTV tiers.
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The average two-year fixed rate for a 95% LTV deal was 5.63% on 10 January, down from 5.67% last week, representing a 0.04% reduction. Meanwhile, the average five-year fixed rate rose from 5.29% to 5.35%.
At 90% LTV, the average two-year fixed rate fell from 5.46% to 5.44% and the average five-year fixed rate dropped from 5.03% to 5.02%.
There was less change at other LTV tiers.
The average two-year fixed rate at 85% LTV increased by 0.01% to 5.08%, while the average five-year fixed rate declined by the same amount to 4.83%.
At 75% LTV, the average two-year fixed rate fell by 0.01% to 4.79% and the average five-year fixed rate stayed the same at 4.65%.
For people with a 40% deposit or equity, the two-year fixed rate dropped from 4.33% to 4.32%, and the five-year fixed rate stayed the same at 4.22%.
Rising govt borrowing costs to have no ‘significant’ impact on lenders
Speaking on the higher cost of government borrowing, which rose to its highest level since 2008 this week, Matt Smith, mortgage expert at Rightmove, said: “The short-term impact is that mortgage rates are likely to rise, as the cost of borrowing increases impacts lenders.”
He continued: “However, this is unlikely to be significant and certainly not completely unexpected. Looking a bit further ahead, the market is still expecting a bank rate cut in February, but beyond that, it is uncertain right now.
“Despite increased costs, we’re at the start of what is traditionally the busiest period of the year for the housing market, so I expect lenders will still want to take advantage of this demand through as attractive rates as possible.”
