The average two-year fixed mortgage rate significantly fell by 0.37% between January and February, its biggest monthly fall since December 2022.

According to new data published by Moneyfacts, average mortgage rates on both the overall two and five-year fixed rate deals fell for a sixth consecutive month.

Two and five-year fixed rates fell to 5.56% and 5.18%, respectively, meaning the average two-year fixed rate currently stands 0.38% higher than the average five-year equivalent.

Moneyfacts also reported that the average standard variable rate (SVR) fell slightly by 0.01%, to 8.17%, while the average two-year tracker variable mortgage remained at 6.15%.

Finance expert at Moneyfacts, Rachel Springall, commented: “Those borrowers who have waited patiently in recent months to refinance, or indeed are preparing for when their mortgage deal expires, would be wise to review rates, as lenders are closely monitoring the volatile swap rate market, which tends to influence fixed rate pricing.

“There have been big expectations for fixed rates to fall further, and whether now is the right time to refinance will come down to an individual’s circumstances. Lenders are in constant review of their ranges, and it is likely rates will fluctuate in the coming weeks due to the noises surrounding future rate expectations.

“The recent observations made by the Bank of England would suggest base rate is unlikely to move for a few months yet, and indeed the Monetary Policy Committee will wait for firm evidence that inflation is under control before even considering a rate cut.”

Moneyfacts also reported that product choice in the mortgage market fell month-on-month for the first time since July 2023, to 5,787 options.

The financial product data provider revealed that the availability of deals at the 95% loan-to-value tier (274) has increased to the highest level since September 2022 (274).

Furthermore, the average shelf-life of a mortgage product rose to 28 days, the highest figure since February 2023 (28 days).

Springall added: “We have seen some product availability drop around other higher LTV brackets, at 90% and 85% month-on-month, so it will be interesting to see whether there will be further declines in these areas over the next few months, or if it’s a short-term adjustment.

“Lenders are actively reviewing their ranges, so product choice could remain volatile, but borrowers must be quick to check deals as the average shelf-life stands at 28 days, the highest in a year.”

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