LATEST: Race to offer best mortgage deals intensifies

HSBC offers first sub-4% five-year fixed rate as the major lenders fight to attract house buyers entering the market.

The mortgage rate war has hotted up in the last few days with lenders fighting to be the most competitive for new year house hunters.

The average five-year fixed mortgage rate is now 4.96%, which is the first time it has dipped below 5% since June 2023, according to Rightmove’s latest mortgage tracker.

And the average monthly mortgage payment on a typical first-time buyer property with a five-year fixed, 85% LTV mortgage, is now £1,100 per month.

First lender

Last week, HSBC became the first lender to offer a rate below 4%, at 3.94% for a five-year mortgage deal. Halifax, the largest lender, and other banks have reduced their rates since New Year’s Day.

Rate cuts are gathering pace, as lenders jostle for position.”

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Matt Smith, Mortgage Expert, Rightmove

Matt Smith, Rightmove’s mortgage expert, says: “Rate cuts are gathering pace, as lenders jostle for position at the start of the year.

“This can only be good news for those looking to move home and those whose fixed deal comes to an end soon.”

Rightmove mortgage tracker headlines:

– The average 5-year fixed mortgage rate now 4.96%, down from 5.16% a year ago

– The average 2-year fixed now 5.29%, down from 5.42% a year ago

– The average 85% LTV 5-year fixed now 5.06%, down from 5.15% a year ago

– The average 60% LTV 5-year now 4.36%, down from 4.81% a year ago

Approvals rise

Meanwhile, the Bank of England released its latest figures for mortgage approvals showing an increase from 47,900 in October to 50,100 in November.

Net approvals for remortgaging increased from 24,000 in October to 27,000 in November.

Cheaper mortgage rates fail to halt slump in house sales

Buyer demand is up…but only slightly, new figures reveal

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