The average rate on a two year tracker mortgage has fallen to 3.40 per cent, its lowest level since Moneyfacts started monitoring rates in 1988.
In the last month the following lenders have reduced rates on base rate tracker mortgages:
In sharp contrast, the average rate on a two year fixed rate mortgage has increased to 4.59 per cent – its highest level in ten months.
Over the last year the shelf life of a fixed rate mortgage has nearly halved from 27 days to just 14 days.
Latest figures show that the demand for mortgages amongst visitors to Moneyfacts.co.uk has risen in the last 12 months from 16.23 per cent to 27.58 per cent.
Michelle Slade, spokesperson for Moneyfacts.co.uk, commented: “Some borrowers have taken a wait and see approach over the last two years, preferring to remain on a lenders standard variable rate (SVR) rather than move to a more expensive mortgage deal.
“Talk of an imminent base rate rise has caused a surge in the demand for new mortgage deals.
“Lenders appear to be trying to tempt borrowers off record low SVRs on to new tracker deals instead.
“Rates on tracker deals continue to be more competitive than fixed rate deals, but borrowers need to ensure they factor in the effect of any base rate rises on their monthly repayment when considering a new deal.
“The rise in swap rates appears to have plateaued, but the rise in fixed rates continues – albeit at a slower pace than a few months ago.
“Borrowers looking for a fixed rate mortgage need to act fast as deals are only in the market for an average of two weeks.”
