Fixed Mortgage Rates Plummet, but Buyers Need to Act Quickly

In welcome news for homebuyers across the Rugby area, average mortgage rates have dropped to their lowest levels since before the October 2024 Budget. However, those looking to secure these attractive rates need to act swiftly, as the average shelf-life of mortgage products has dramatically shortened.

According to the latest Moneyfacts UK Mortgage Trends Treasury Report, February saw substantial decreases in average fixed mortgage rates. The average two-year fixed rate fell from 5.52% at the start of February to 5.39% by early March, while the average five-year fixed rate decreased from 5.32% to 5.22% during the same period.

"The rate cutting momentum was prevalent during February, with the average two- and five-year fixed rates seeing their biggest cuts in almost six months," noted Rachel Springall, Finance Expert at Moneyfacts.

This positive trend represents the most significant monthly drop since early October 2024, offering a glimmer of hope for prospective homebuyers in our town and the surrounding villages.

Competitive Market Creating Volatility

The increased competition among lenders has created a dynamic marketplace, with products being regularly updated and replaced. As a result, the average shelf-life of a mortgage deal has plummeted from 36 days in February to just 16 days in March.

"The churn of ranges and rate moves circulated around swap rate volatility, but also due to a drop to the Bank of England base rate near the start of the month. Lenders typically act within a couple of weeks of any fierce rises or falls to swap rates," Springall explained.

This rapid turnover means that homebuyers in Warwickshire need to be prepared to move quickly when an attractive deal becomes available, highlighting the importance of working with experienced local estate agents who understand the market dynamics.

Boost for First-Time Buyers

The news is particularly encouraging for first-time buyers in the local area, who have faced significant affordability challenges in recent years. Average rates for low-deposit fixed rate deals saw notable decreases month-on-month.

For example, average rates on 95% loan-to-value (LTV) products fell by 0.11 percentage points for two-year fixes and 0.09 percentage points for five-year fixes, bringing them down to 5.83% and 5.63% respectively. This represents the largest drop in the average two-year fixed rate since September 2024.

Those with slightly larger deposits will find that average two-year fixed rates on 90% LTV deals also dropped by 0.11 percentage points to 5.69% in the month to March, while the average five-year fixed rate decreased from 5.47% to 5.40%.

In addition to lower rates, first-time buyers now have more products to choose from, with the number of 95% LTV products rising to 395 and 90% LTV products increasing to 772 by early March.

Record Number of Mortgage Options

It's not just low-deposit mortgages that have seen increased availability. The total number of mortgage deals across all LTVs has grown from 6,451 at the start of February to 6,684 by early March – the highest figure recorded since February 2008.

This expanded range of options gives homebuyers throughout the Rugby community more flexibility when choosing a mortgage that suits their specific circumstances. However, with rates changing quickly, having expert guidance becomes even more crucial.

Is Now the Right Time to Apply?

While the falling rates and increased product availability are encouraging signs for those planning to purchase property in Warwickshire, timing remains a critical consideration.

Some borrowers might be tempted to delay their mortgage application in hopes of further rate reductions. However, it's important to remember that rates can be volatile and aren't guaranteed to continue falling. The uncertain economic climate means that conditions could change rapidly.

Moreover, interest rates shouldn't be the only factor considered when selecting a mortgage. Other elements such as product fees and incentives like cashback or free valuations can significantly impact the overall value of a deal.

Recent analysis by Moneyfactscompare.co.uk found that as of 27 February 2025, 36% of fixed mortgage deals didn't charge any product fees, while 22% offered cashback and 73% included a free or refunded valuation. This variation can make it challenging to determine which mortgage offers the best overall value for your situation.

Seek Expert Advice

With such a dynamic mortgage landscape in the local area, seeking professional advice has never been more important. A mortgage broker can provide valuable insights into current market conditions and help identify the most suitable products based on your specific requirements and financial circumstances.

For those looking to buy or sell property in Rugby and the surrounding villages, partnering with experienced estate agents who understand the local market is equally important. Their expertise can be invaluable in navigating the property journey, from finding the right home to securing appropriate financing.

At Ellis Brooke, we remain committed to providing our clients with up-to-date market information and connecting them with trusted financial advisors who can help them secure the best possible mortgage deals in these rapidly changing conditions.

If you're considering purchasing a property in the local area and would like to discuss your options, our team is always available to provide guidance and support throughout your property journey.