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In July 2023 the mortgage market remained volatile after another rate rise caused average mortgage rates to rise after a brief fall. 


According to UK Finance, around 2.4 million fixed-rate mortgage deals will end between now and 2024, resulting in higher mortgage payments for homeowners who took advantage of historically low interest rates when they took out their mortgage deals. 


At the time of writing, the average two-year fixed-rate residential mortgage edged up to 6.8% from 6.79%, according to Moneyfacts. Similarly, five-year fixed-rate mortgages went up to 6.32% from 6.31%. This was a short-term dip and the first rate fall for several months. 


Over 400,0000 people will be moving off their fixed-rate deal between July and September this year and, as a result, will face higher outgoings against the backdrop of a continuing cost-of-living crisis. 


On July 19 the latest figures from the Office for National Statistics revealed that inflation had fallen faster than expected, offering hope to borrowers who face increasing pressure. The consumer prices index fell to 7.9% in June, down from 8.7% in May. The Bank of England base rate is used to mitigate inflation but is still expected to raise interest rates again in the next meeting of the Monetary Policy Committee despite interest rates currently sitting at 5%. The Bank of England aims to reduce interest rates to 2%. 


The latest fall in inflation was more significant than had been expected and could result in a lower increase in interest rates. The market saw some competitive deals emerging, and securing one of these deals is fine if your fixed rate is due to end within the next six months while waiting to see if something cheaper becomes available. Securing an offer doesn’t mean you’re tied in, so this could give you peace of mind while seeing how the market behaves. 


There is hope that interest rates will continue to fall, but it could be a few months before the picture becomes clear. 


Less than two years ago, the average fixed rate five-year mortgage deal was just 2.55%.