Last week, Mortgage Solutions revealed that short-to-medium term fixed rate deals hit their lowest ever level, with the average two-year fixed rate at 4.36%, three-year fix at 4.95% and five-year fix at 5.73%.
Today, Moneyfacts revealed that the average two-year fixed rate has fallen even further to 4.32%, while the average three-year and five-year fixed rates are 4.92% and 5.29% respectively.
The average rate on a two-year tracker is 3.37%.
Michelle Slade, spokesperson for Moneyfacts.co.uk, said speculation over base rate in H1 had triggered a rise in mortgage rates, but lenders have reduced rates in the last few months to battle it out on the best buy tables.
She said: “Lenders appear to be applying cuts equally across all LTV tiers, which is good news for first-time buyers, as previously cuts were only being applied to the lower LTV bands.
“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 added that as soon as the market expects a base rate rise, mortgage rates will start to increase again.
“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,” Slade said.
