Average 5 Year Fixed Rate Mortgage Back Below 6%

Published / Last Updated on 29/09/2023

Data from moneyfacts.co.uk has found that the average 5-year fixed rate mortgage in the UK has fallen below 6% for the first time since July.

Whilst this may not come as a shock to some, it may do for many given Bank of England base rates were kept at 5.25% pa last week rather than increasing of decreasing.

Why Are Rates Falling/Stabilising?

There are several reasons:

  • With inflation falling slightly and further falls expected, more people are confident that the 14-month cycle of consecutive interest rate rises is coming to an end.
  • Borrowers are getting used to the fact that the days of 0.1% - 1.0% pa Bank of England rates and then mortgage rates at around 2% pa are gone.
  • Average pay rises of over 6% pa mean more borrowers are comfortable with taking a mortgage on in the 5% pa bracket.
  • Property prices are falling, again making it more affordable for borrowers to buy property of their choice with a lower deposit and lower borrowing despite a higher rate than 2 years ago.
  • Banks and building societies are awash with money as many plough their savings into cash to secure 5%-6% deposit savings rates.
  • This cash bubble in banking groups is creating a mini-mortgage rate war as lenders compete to offer more competitive mortgage deals and to offload ‘war chests’ of investor cash to borrowers.


We hope we will return next year to what we know as ‘normal market conditions’ with inflation at 2.5% pa, Bank of England rates at 3-4% pa and competitive mortgage rates in the 4-5% pa band.  We still have some way to go but we see 2024 as the start of this return to normality unless of course, we get another global shock event.

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