Two-year tracker mortgage rates have fallen to an average of 3.4% – their lowest level in 23 years.
A host of lenders have slashed their tracker rates in recent weeks – including big players like the Nationwide, Santander and the Woolwich.
Meanwhile, two-year fixed rates have clawed their way to 4.59% – the highest average for almost a year.
The figures come from independent mortgage monitor Moneyfacts, which has watched tracker mortgage rates since 1988.
Several banks and building societies are offering sub-3.4% discounted tracker rates over two years.
The market leader is Hinckley and Rugby Building Society with a 75% loan-to-value deal at 2.44% for 24 months reverting to 5.64%. The package comes with a £100 arrangement fee and a £695 completion fee.
HSBC has a discounted 24 month tracker at 80% loan-to-value at 2.79% for the initial discount period, reverting to 3.94%after two years. The booking fee is £99.
Michelle Slade, speaking for Moneyfacts, said: “Some borrowers have taken a wait and see approach over the last two years, preferring to remain on a lenders standard variable rate 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.”
