Mortgage rates fall for first time since May…

Mortgage rates have dipped for the first time in two months as better than expected inflation data drives down expectations for future interest rates.

The average quoted rate on a two-year fixed-rate mortgage fell from 6.81pc to 6.79pc on Thursday (20th), according to Moneyfacts, a data company.

The cost of a five-year fix also fell to 6.31pc, down from 6.33pc on Wednesday.

This was the first time the rate on either type of deal has fallen since the end of May, after the release of surprisingly high April inflation data sent borrowing costs spiralling.

Rates on fixed rate deals stabilised earlier this week following a fall in swap rates, which determine lenders’ borrowing costs.

Swaps fell further on Wednesday after the release of lower than expected June inflation data, which pushed investors to lower their expectations for the peak in the Bank Rate and triggered a drop in gilt yields, both of which flow into bank’s borrowing costs.

But mortgage rates are still well above their mini-Budget peaks. Back in October, the average cost of a two-year fix hit 6.65pc, while five-year fixes peaked at 6.51pc.