As of 1 June, the average rate for a fixed mortgage with a fee is 2.30 per cent, a significant drop on the 2.89 average seen in March.
For a fixed mortgage with incentives and no fee, the average rate decline is similar at 2.28 in June down from 2.8 per cent in March.
The average standard variable rate now sits at 4.48 per cent, a 0.42 per cent decrease since the start of March.
Moneyfacts said the fall in average rates was to be expected, following a record low base rate and a withdrawal of high loan to value (LTV) deals.
Incentivised deals
The proportion of mortgage deals with no product fee or incentive packages have risen since March. Mortgages with free or refunded legal fees accounted for 54 per cent of fixed deals on the market in June.
In March, such deals accounted for 49 per cent of products.
However, there are actually fewer products of this kind on the market overall as the 49 per cent in March made up 2,157 products while the 54 per cent in June make up 1,220 mortgage deals.
Mortgages with a free or refunded valuation account for 78 per cent of the fixed market, up from 71 per cent in March. Again, this represents less availability as it in June it accounted for 1,745 mortgages compared to 3,145 in March.
Deals with cashback saw a slight rise, accounting for a third of fixed mortgages compared to 31 per cent in March. As for the number of products available in this category, there were 744 in June and 1,377 in March.
Moneyfacts also found that the average product fee was cheaper in June at £1,029, slightly down from £1,040 in March.
Eleanor Williams, spokesperson at Moneyfacts.co.uk, said: “A consideration for those debating whether or not to look for a new mortgage deal is that the low initial rates we are currently seeing may potentially increase once lenders are able to return traditionally higher rated, higher LTV products to their ranges.
“These changes suggest that despite operational difficulties and economic uncertainty, lenders are not just competing on rate, but are also tailoring their overall packages to entice borrowers too.”
