Average mortgage rates on the overall two and five-year fixed rate deals fell month-on-month by 0.21% and 0.18% respectively during August, new Moneyfacts data has indicated.

The two-year fixed rate is now at its lowest level since February this year, while the five-year average is at its lowest level since March.

Moneyfacts’ latest UK Mortgage Trends Treasury Report revealed that the overall average two and five-year fixed rates fell between the start of August and the start of September, to 5.56% and 5.20% respectively

The average two-year fixed rate is currently 0.36% higher than the five-year equivalent and has still been higher since October 2022.

“It can take a few weeks for lenders to react to a volatile swap rate market, so it’s good to see mortgage pricing moving in a positive direction,” finance expert at Moneyfacts, Rachel Springall commented. “A sense of product stability also returned to the market, as the average shelf-life of a deal rose to 21 days, up from 17 days in August.

“This month marks two years since the fiscal announcement took place, and subsequent unsettled times saw significant rises to mortgage rates. At the start of September 2022, the average two-year fixed mortgage rate stood at 4.24%; a year later it was 6.70%.

“Fixed mortgage rates are now much lower than they were this time last year, but it remains the case that the average five-year average rate is lower than its two-year counterpart, which has been the case since October 2022.”

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