Competition in the first-time buyer market has driven a fall in the average two-year fixed rate, according to Moneyfacts.
Data collected by the firm shows the overall average two-year fixed rate mortgage has fallen 0.04 per cent, from 2.53 per cent in August 2018 to 2.49 per cent this month.
In the 95 per cent LTV category, the average two-year fixed rate has decreased from 3.95 per cent to 3.41 per cent over the same time frame.
In contrast, the average 70 per cent LTV fix has risen by 0.14 per cent, from 2.35 per cent to 2.49 per cent.
Moving to the 75 per cent LTV fixes, the average rate has nudged up 0.05 per cent, from 2.30 per cent to 2.35 per cent.
According to Moneyfacts, building societies are focusing on higher tiers, with the average 95 per cent LTV two-year fix offered by these lenders at 3.35 per cent, 0.06 per cent lower than the average offered by other types of lenders.
However, the average rate for the 60 per cent LTV offered by building societies is currently 1.95 per cent, 0.08 per cent higher than the overall average of 1.87 per cent.
Moneyfacts adds that building societies account for 37 per cent of all 95 per cent LTV two-year fixes on the market compared to 16 per cent of all the 60 per cent LTV two-year fixed rate products.
Finance expert Darren Cook comments: “There clearly seems to be a concerted drive by mortgage providers to try and secure the business of potential FTBs, who are the lifeblood of the mortgage and property markets and it is encouraging to see rates decrease as a result of some healthy competition.”