Some average mortgage rates edged down on Thursday, but it is “too soon” to say whether it marks a turning point for borrowers, according to a financial information website.
The average two-year fixed homeowner mortgage rate on Thursday morning was 5.89%, edging down from 5.90% on Wednesday, Moneyfactscompare.co.uk said.
The average five-year fixed residential mortgage rate on Thursday morning was 5.77%, down from 5.78% on Wednesday.
The decrease follows the announcement of an Iran ceasefire deal, although doubts have been raised about its stability.
Swap rates, which are used by lenders to price mortgages, have been rising in recent weeks amid financial market volatility.
Fixed-rate mortgage deals are still significantly higher than they were just weeks ago.
Average two-year and five-year fixed-rate homeowner mortgages have risen from 4.83% and 4.95% respectively at the start of March.
Rachel Springall, a finance expert at Moneyfactscompare.co.uk, said: “Spring is meant to be a flourishing season for the mortgage market, especially for those looking to buy their first home.
“Unfortunately, the mortgage mayhem caused by the unrest in the Middle East led to a flurry of rate hikes by lenders throughout March. Lenders also pulled deals from sale, some temporarily, but it led to an overall reduction of 17% in product choice within the space of a month.”
She added: “Over the past few days, we have seen a couple of lenders cut fixed mortgage rates, but it’s a bit too soon to say whether this is the turning point for borrowers overall.”
She said that while the decrease is positive, fixed rates remain around one percentage point higher than they were at the start of March.
Ms Springall said: “It is more likely that lenders will see the latest ceasefire as a period of grace to slow down the pace of interest rate changes over the next couple of weeks, rather than them moving in their droves to significant rate cuts.
“Swap rates are still hovering around 4% and really, we need more reassurances on inflation forecasts to give the market a better sense on whether (the Bank of England base rate) might be increased in the short-term.”
