The average five-year fixed rate has dipped from 5.67 per cent in November to 4.32 per cent currently.
L&C Mortgages said that monthly payments could be over £100 lower based on a typical £150,000 repayment mortgage over 25 years.
Figures show that monthly payments for the average two-year fixed rate have decreased from £957.30 in November to £848.29 now.
Five-year fixed rate monthly payments currently stand at £818.50, which is a fall from £936.42 in November.
SVRs climb to nearly seven per cent
L&C Mortgages said that the Standard Variable Rate (SVR) has climbed, with the average for top ten lenders standing at 6.73 per cent.
This is up from 5.63 per cent in November.
The broker said that monthly payments in November stood at £932.81, whereas now monthly payments come to £1,034.47.
It added that this would cost homeowners almost £2,600 more per annum than the average five-year fixed rate at 4.32 per cent.
The firm added that with another base rate increase due this week, the average SVR would likely continue to increase.
L&C Mortgages offers a free rate check service to see if borrowers could benefit from a lower rate and has brought out an exclusive five-year fixed rate at 4.15 per cent.
It has an arrangement fee of £1,395, free valuation and help for basic legal work for remortgages. There is a fee-free version priced at 4.35 per cent.
The rollercoaster ride continues
David Hollingworth (pictured), associate director at L&C Mortgages, said: “The rollercoaster ride for mortgage borrowers continues and many may have lost track of how much fixed rates have improved since the pandemonium following the mini Budget.
“Funding conditions have improved and as lenders compete harder for mortgage business, a price war has broken out, sending fixed rate costs plummeting. As a result, the cost of the current best in class fixed deals is potentially thousands per annum lower than just a few months ago.”
He said that whilst pricing had improved it was “higher than the lows of recent years” and those on fixed rate deals that were expiring would need to “plan ahead”.
Hollingworth said that he expected rate cuts would continue even if there was another base rate increase this week.
He added that those on SVR should “urgently review their options” as they were often seven per cent or more, and a penalty free tracker could offer a “better holding position”.
“Many borrowers will prefer the security of a fixed rate so they at least know where they stand with their biggest outgoing. The fixed rate improvements mean that rates are now at the lowest level since the mini Budget sent them into orbit.”
