the rates on tracker mortgages have fallen to their lowest level ever, research from Moneyfacts.co.uk has revealed.
The average rate on a two year tracker mortgage has fallen to 3.40%, the lowest level since Moneyfacts.co.uk started monitoring rates in 1988.
In the last month, a number of lenders have moved to reduce rates on base rate tracker mortgages including the Cumberland Building Society, ING Direct, Nationwide Building Society, Northern Bank, Northern Rock, Platform, Principality Building Society, Santander, and The Mortgage Works.
By contrast, the average rate on a two year fixed rate mortgage has increased to 4.59%, the highest level for ten months.
The research also showed that the amount of time a mortgage deal is available on the market has halved over the past year.
The shelf life of a fixed rate mortgage has dropped from 27 days a year ago to just 14 days.
At the same time, demand for mortgages, as measured by Moneyfacts.co.uk, has risen from 16.23% to 27.58%.
Michelle Slade, spokesperson for Moneyfacts.co.uk, said some borrowers had adopted a wait and see approach over the last two years, preferring to remain on a standard variable rate (SVR) rather than move to a more expensive mortgage deal.
"However, talk of an imminent base rate rise has caused a surge in the demand for new mortgage deals," she added.
"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.
"Borrowers looking for a fixed rate mortgage need to act fast as deals are only in the market for an average of two weeks."
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