Lenders cut the price of their fixed-rate and tracker mortgages in January, but is this a flash within the pan or perhaps a sign that cheaper mortgage deals are returning?
After annually of price rises, mortgages are looking at cost again, having a host of banks amending their rates recently.
Here, we explain the latest market trends and provide suggestions about choosing the best mortgage, whether you’re buying a home or varying your deal.
Fixes and trackers fall in price
Last year, fixed-rate and tracker mortgages became more expensive at almost all loan-to-value (LTV) ratios, as lenders faced higher funding costs and passed on rises staying with you of England base rate.
In February 2022, however, the average price of mortgages dropped slightly, as shown within the chart below, offering some welcome great news for homebuyers and remortgagers.
Mortgage rates year-on-year
Despite these price reductions, there’s still some distance to visit before we see the kind of record-low rates which were on offer last year, prior to the base rate increased to 0.75%.
Five-year fixed-rate deals are leading the charge, however, with greater competition leading to average rates being just 0.06% higher than last February.
| Type of mortgage | February 2022 | February 2022 | Percentage change |
| Two-year fixed | 2.35% | 2.49% | +0.14% |
| Three-year fixed | 2.56% | 2.66% | +0.10% |
| Five-year fixed | 2.84% | 2.90% | +0.06% |
| Two-year tracker | 1.98% | 2.10% | +0.12% |
Why are rates falling?
A drop in home loan rates is a great thing for consumers, but will prices continue to tumble all year round? In reality, this depends on a selection of factors.
January’s rate drop was likely affected by each of the following things:
Cheapest mortgage rates
The tables below show the cheapest introductory rates now available on fixed-rate and tracker mortgages, at four popular LTV ratios.
While these tables offer an illustration of the rate you might be able to get, remember that some mortgages have certain criteria you must fulfil – for example minimum or maximum loans.
Two-year fixed-rate mortgages
| Loan-to-value | Lender | Initial rate | Revert rate | APRC | Fees |
| 60% | Leeds | 1.39% | 5.69% | 4.8% | lb1,999 |
| 75% | Atom Bank | 1.44% | 4% | 3.6% | lb1,200 |
| 90% | Atom Bank | 1.79% | 4% | 3.5% | lb1,200 |
| 95% | Halifax* | 2.67% | 4.24% | 4.2% | lb1,495 |
Five-year fixed-rate mortgages
| Loan-to-value | Lender | Initial rate | Revert rate | APRC | Fees |
| 60% | Halifax | 1.79% (first-time buyers), 1.80% (home movers) | 4.24% | 4.2% | lb1,495 |
| 75% | Halifax* | 1.89% | 4.24% | 4.2% | lb1,495 |
| 90% | Atom Bank | 2.24% | 4% | 3.4% | lb1,200 |
| 95% | Monmouthshire | 3.19% | 5.24% | 4.6% | None |
Two-year tracker mortgages
| Loan-to-value | Lender | Initial rate | Revert rate | APRC | Fees |
| 60% | Halifax | 1.34% (base rate +0.59%) | 4.24% | 3.9% | lb999 |
| 75% | Leeds | 1.38% (base rate +0.63%) | 4.69% | 4.8% | lb999 |
| 90% | Accord Mortgages | 1.99% (base rate+1.24%) | 4.25% | 4.4% | lb995 |
| 95% | Skipton | 2.99% (base rate+2.24) | 4.99% | 4.8% | lb495 |
How to compare mortgage deals
Choosing a mortgage isn’t as simple as getting the best introductory rate it is possible to, as headline-grabbing rates don’t always tell the entire story.
Follow these tips when you compare mortgages:
