The average interest rate across two-year fixed rate mortgage products is at its lowest since the Bank of England base rate dropped to 0.5 per cent in March 2009, according to the latest research from moneysupermarket.com
Fixed rate mortgages have steadily fallen over the last couple of years, with the rate on the average two-year product now standing at 4.25 per cent. This compares with an average of 5.59 per cent in spring 2009. Three-year fixed rates are at their lowest since December 2010 while five-year products are at their lowest rate since January 2011 at 4.80 per cent and 5.27 per cent respectively.
The average two-year tracker rate is 3.58 per cent – its lowest level since January 2011. Base rate would have therefore have to rise by 0.60 percentage points over the next two years for the tracker to equal to average two-year fixed rate.
The rates on three-year trackers have also edged downwards, with the average now 4.05 per cent – its lowest level since February 2011.
Clare Francis, mortgage spokesperson at moneysupermarket.com said: “It’s great to see fixed rate mortgage rates coming down and we are now seeing average rates falling to their lowest levels in several years. Many borrowers are worried that high inflation will result in base rate rising in the not too distant future and for these people it’s obviously great news that they can protect themselves from this eventuality by locking into a fixed rate at a lower level than they’d have been able to do a few months ago.”
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