Mortgage Market Update: Sub-4% deals return as rates ease
Homeowners and buyers alike are beginning to see a glimmer of good news as mortgage rates begin to ease, with sub-4% deals reappearing on the market for the first time in months. This shift offers some relief after a prolonged period of rising borrowing costs and signals a more optimistic outlook for the housing market.
As of early June, the average two-year fixed mortgage rate has dropped to 4.54%, down from 4.66% at the end of February. Meanwhile, the average five-year fixed rate has fallen to 4.32%, compared to 4.39% just a few months ago. These modest but meaningful reductions reflect growing confidence that rates may continue to fall through the remainder of the year.
Several high street banks and building societies have responded by trimming their own rates, anticipating further cuts in the near future. This move comes in the wake of the Bank of England’s decision to reduce the Bank Rate to 4.25% this month, following a pause in March.
Global trends are also playing a role. The International Monetary Fund (IMF) has now revised its forecast to project three rate cuts in 2025, up from the two it previously anticipated. This shift comes amid changes in global trade sentiment, including newly introduced US tariffs, which have added complexity to inflation dynamics. While inflation remains elevated, the broader economic signals suggest a turn toward easing policy may be on the horizon.
For homeowners coming to the end of their fixed-rate deals or those looking to get on the property ladder, this could be an opportune moment to explore new mortgage options.
If you're considering your next move or want tailored advice, book an appointment with our mortgage advisor, Callum Booth, today by contacting info@pendlehillproperties.co.uk.
