Mortgage Rates Dip Below 5% for First Time Since 2022 – What It Means for You

Mortgage borrowers have cause for optimism!

For the first time since September 2022—before the mini-budget upheaval led by former Prime Minister Liz Truss sent mortgage rates soaring—the average two-year fixed mortgage rate has dipped below 5%, landing at around 4.99%.

This milestone reflects renewed competition among lenders now that the Bank of England has reduced its base rate, most recently to 4%. It also marks a return to more traditional rate structures, with two-year deals now actually cheaper than five-year ones, reversing a trend that emerged during the mortgage market volatility of 2022.

Matthew Limb says:

“This is welcome news for anyone looking to move or remortgage. Lower borrowing costs improve affordability, widen choice for buyers, and can help sellers secure a quicker sale. It’s another sign of stability returning to the housing market.”

Why This Matters for Buyers and Sellers in East Yorkshire:

First-time buyers and remortgagers: This is an excellent moment to lock in more attractive deals—secure, short-term fixed rates are now more affordable.
Homebuyers: Lower monthly repayments may expand your budget and increase affordability.
Property investors: Borrowing costs are easing—this could make refinancing and purchasing second homes or investment properties more viable.

BBC News – August 2025

Back to News & Insights