Average fixed and tracker mortgage rates have fallen to their lowest level since "Moneyfacts" Group started recording rates in 1988, figures show. Lenders have steadily reduced mortgage rates in recent months, with a significant number of competitive tracker and fixed products becoming available as a result.
It marks a sea change from earlier in 2011 when an anticipated rise in the Bank of England base rate of interest saw mortgage rates begin to rise. However, recent economic data has suggested that any recovery is in its early stages, lessening the prospect of the measure being raised from its all time low of 0.5% this year. In the fixed rate market, the average two year product currently carries a rate of 4.32%, while the average three year fixed rate mortgage is 4.92%. In addition, the average rate of a five year fixed rate mortgage is 5.29%. Tracker mortgages have also seen a fall in rates, with the average two year product declining to 3.37%.
Figures show that cuts are being equally applied across all loan-to-value tiers, but Michele Slade, spokesperson for "Moneyfacts Group", says that trend could be short-lived. "While rates may still fall slightly further, it is likely that some lenders will instead opt to make existing competitive deals available to borrowers with smaller deposits," she commented. "If borrowers delay too long to secure a new mortgage deal, they could find that they miss out on some of the lowest rates ever seen."
