Money latest: Travel expert shares tip for stress-free entry into US under Trump | Money News

Every Friday, we take an overview of the mortgage market with industry experts and round up the best rates with Moneyfactscompare.co.uk. 

Typical two and five-year fixed rate deals are sitting at less than 5% for the first time in more than two years – but borrowers have been warned that recent falls could start to go into reverse. 

The average rate for a two-year fix is now 4.97%. For a five-year deal, it’s 4.99%.

Rates have been edging down slowly over recent months, marking positive news for borrowers coming off high two-year fixes, and first time buyers. 

But they’re still higher than they were five years ago, meaning those coming off longer term fixed deals are likely to face more expensive bills. 

Those thinking that they’ll get a lower rate if they wait a little longer might want to reconsider after reading what several experts had to say. 

While economists are still expecting the Bank of England to cut the base rate again in November, brokers are anticipating mortgage rate cuts to slow or stall completely due to higher-than-expected inflation. 

Is now the time to fix? 

“Reductions have tended to come in small increments, but we could see that slow further or even reverse in some cases if the market reacts badly to the threat of higher inflation than was previously expected,” said David Hollingworth, associate director at L&C Mortgages. 

“It does therefore look as though taking a fix now could be a good move. It will secure the rate and avoid losing out if they do tick back up a little, but should still give the chance to switch to a lower rate if further reductions feed through before the new deal completes.” 

He said most borrowers opt for a fixed deal, but with the difference between the average two and five year rates being so close, the key issue is deciding how long to fix for. 

The reason they are so close, he said, is due to expectations that the base rate may have a little further to fall, and could ultimately bottom out and remain pretty stable for the medium term.

“Rather than be drawn to the lowest monthly payment it’s always worth considering whether additional security could suit your circumstances better,” he said. 

“No one knows what will happen to interest rates so it could give greater peace of mind and remove concern over fluctuating payments. It also avoids the need to review the deal every couple of years and any fees that could come with that.” 

Peter Stimson, director of mortgages at lender MPowered, said the jump in inflation would “slam the door” on the chance of any meaningful reductions in the coming weeks. 

“Competition between lenders is intense, but mortgage rates may well have fallen as far as they can for now. They may even creep up over the next month or so as lenders recalibrate in response to rising swap rates.”

Ranald Mitchell, director at brokerage Charwin Mortgages, said lenders have been keeping the market competitive, but stubborn inflation means they can only go so far. 

“For millions of homeowners, that means remortgage deals won’t be getting much cheaper anytime soon,” he said. 

Barclays was one of those lenders heating up the rate war this week, reducing rates for borrowers with large deposits to as low as 3.79%.

In the buy-to-let market, cuts to fixed rate deals were made by a handful of lenders, with many of the larger reductions coming from challengers and mutuals. 

Coventry Building Society reduced fixed rate mortgages by up to 0.38% and the Mortgage Lender by up to 0.5%.

While the average two year buy-to-let deal has fallen to less than 5%, the five-year rate is still sitting above that threshold at 5.21%. 

Adam French, head of news at Moneyfacts, said: “It is promising for landlords to see mortgage costs falling. However, the latest CPI inflation reading of 3.8% has effectively shut the door on the chances of another base rate cut this year. 

“As a result, a few modest mortgage rate reductions are the best they can probably hope for in the short term as lenders adjust to the prospect of higher rates for longer.” 

Here’s a look at the lowest rates currently on the market for landlords… 

For those looking to save on the upfront cost of a deal, a best buy deal might be a good option.

Moneyfacts rounds up the best ones here…