According to data from Octane Capital, the decline in swap rates since last week's Bank of England base rate cuts provides a “Light on the Horizon” for home buyers and buyers.
The bank's Monetary Policy Committee voted 7-2 last Thursday to cut interest from 0.25% to 4.5%. 
Since then, the average five-year swap rate, which is the basis for mortgage rates, is 4.22%, from 4.33 a month ago.
The specialist lender added that the five-year swap averaged 4.23% between the October budget and the end of last year, rising to 4.31% between January 1st and 6th this year.
The company notes that the valued BTL mortgage rate fell to 4.53% last month from an average 75% loan over two years, but fell to 4.38% last month.
The average 75% LTV rate provided by the owners over the two years has dropped from 4.81% in 2024 to 4.65% this year.
Octane Capital CEO Jonathan Samuels said: “Of course, it's still very early on, but current market indicators suggest that there is light on the horizon for home movers and purchasing investors in the country. Compared to 2024, it's a much larger positive. To become one of them.
“Not only has we seen swapping rates heading down this year so far, but this is a trend that has been strengthened by the Bank of England's decision to cut the base rate to 4.5% last week, and some Industry sources already show five – the year's swap rate is below the 4% threshold. This is big news.”
Samuels added: “The lenders have acted with greater confidence and have chosen to lower their mortgage rates in anticipation of recent interest rate cuts.
“This outlook is very good over the next year and we hope that mortgage affordability will continue to be strengthened over the coming months, providing a much needed boost to the sentiment of the real estate market. ”
