Moneyfacts data shows that the average two-year fixed rate mortgage is now 2.51 per cent – down 0.1 per cent from last week.
In mid-August the average rate hit a two-year high, coming in at 2.55 per cent, but it has been heading progressively downwards since – although not quite to the 52-week low of 2.17 per cent, seen on 25 September 2017.
Moneyfacts financial expert Charlotte Nelson says: “Swap rates are going down – or at least levelling off – and providers are adjusting to this… most lenders incorporated the [recent Band of England] rate rise into their products before it was announced, and now they can look around and see what other lenders are doing and readjust accordingly.
Additionally, “the 95 per cent LTV market is falling across all fixes, which is having a big effect.”
Nelson also points to heavy remortgaging activity, leading to lenders “tying to look more attractive to borrowers,” as a reason for competition remaining high despite the rate rise.
On Monday, Moneyfacts predicted that more remortgaging activity is on the cards due to the gap between the average two-year fix and the average SVR being at a ten-year high.