The interest rate on the average five-year fixed mortgage has dropped below 6% for the first time in nearly three months.
According to financial information firm, Moneyfacts, the last time the average five-year rate was below 6% was 3 July.
Mortgage bills had been going up as the Bank of England has brought up base interest rates in an effort to reduce inflation, which currently stands at 6.7% – more than three times the Bank’s target of 2%.
In response to increased base rates, decided by the Bank’s Monetary Policy Committee, lenders have been increasing the rates they offer on their mortgages.
But a surprise drop in key measures of inflation has brought to a halt the Bank’s programme of 14 rate rises. While the 6.7% rate of inflation is high, it’s lower than economists had expected
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