The average rate for a two-year fixed mortgage has continued to fall and is 2.03 per cent as of 15 May, the lowest point it has been for a year, analysis from Moneyfacts shows.

This is down from the 2.15 per cent average seen in April and the 2.48 per cent average recorded during May last year.

The current average rate is also significantly lower than the high of 2.50 per cent which was seen in June 2019.

Eleanor Williams, spokesperson for Moneyfacts, said: “The impact of the ongoing pandemic crisis and two base rate cuts have been felt keenly across the mortgage market.

“Lenders are continuing to adapt and evolve in an ever-changing environment and we are beginning to see positive movement with providers starting to relaunch deals, widen the loan to value (LTV) caps which were put in place, and make rate reductions across selected products.”

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Fewer high rate products

Although some lenders have brought lending capacity back up to higher limits, Williams said the limited number of high LTV products which tend to have higher rates could be contributing to the low average.

“On the other hand, for those eligible and looking at remortgaging and at lower loan-to-value products, this could be a good time to consider their options,” she added.