Relief for homeowners as mortgage rates finally dip

SQUEEZED homeowners finally had reason to cheer yesterday as average mortgage rates fell for the first time in months

- Giles Sheldick

The cost of borrowing on two and five-year fixed-rate deals dropped, financial analysts Moneyfacts found.

The average rate for a 24-month fixed deal now stands at 6.79%, down from 6.81% - while the typical five-year rate dipped down to 6.31% from 6.33%.

Most mortgage payers are on fixed-rate deals, but fear borrowing costs when deals have to be renegotiated.

The Bank of England raised its base rate to 5% in June from 4.5%, the highest level since 2008.

The 0.5% increase was the 13th consecutive rise - and a greater jump than many economists expected.