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Fixed mortgage rate touches 4.63%
4:11pm Tuesday 27th April 2010
© Press Association 2010
Fixed-rate mortgage deals have fallen to their lowest level for a year as competition continues to return to the market, research has shown.
The average cost of a two-year fixed-rate loan now stands at 4.63%, the lowest level since April last year and down from a recent high of 5.21%, according to financial information group Moneyfacts.co.uk.
The reduction would save someone with a typical £150,000 mortgage around £50 a month.
There have also been falls in the cost of three and five-year deals, with these falling to 5.34% and 5.85% respectively, from highs of 5.61% and 6.24%.
The reductions have prompted commentators to say now may be a good time for people on their lender's standard variable rate to consider remortgaging to a fixed-rate deal.
Choice is also continuing to increase, with the number of different mortgages available reaching 2,076, the highest level since December 2008 and 72% above the record low reached in April last year.
A significant proportion of the new mortgages are also for people with smaller deposits.
There are now 19 different deals available for people with only 5% to put down, a 533% increase compared with a year ago, while the number of 90% loan-to-value mortgages has risen by 107% during the same period, and choice for people with a 15% deposit has increased by 85%.
Michelle Slade, spokeswoman for Moneyfacts.co.uk, said: "Lenders have slowly become acclimatised to a new look mortgage market and continue to take more steps to improve the competitiveness of deals.
"Lenders are becoming more active in the mortgage market, which is welcome news for borrowers as increased competition is one of the overriding factors in driving rates downwards."