Rates now stand at 1.97 per cent on a typical two-year fix, analysis by Moneyfacts has found.
It is the lowest level in a year and compares to 2.49 per cent in June last year.
The fall in rates is largely because the number of higher loan to value products has fallen dramatically since the UK went into lockdown during the coronavirus outbreak.
Rates on these products are generally higher so their disappearance is pulling down the average.
Lenders that have been offering higher LTV mortgages in recent weeks have found they have been overwhelmed with demand, and limited availability.
Moneyfacts spokeswoman Eleanor Williams said: “Borrowers considering their mortgage options may be very pleased to see that average rates remain at record low levels.
“However, these lows may in part be fuelled by the fact there are only a small number of higher loan-to-value products currently available in the market.
“Therefore there is the potential for these to increase once lenders reintroduce more products for those with low levels of deposit or equity, as these higher-risk deals traditionally tend to carry higher rates.
“Those eligible and wishing to explore their mortgage options may wish to move swiftly to take advantage now.”