The average rate on a two-year tracker mortgage is now 3.40%, while the average rate on a two-year fixed rate mortgage has increased to 4.59%.
Michelle Slade, financial analyst for Moneyfacts.co.uk, says 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.
She says: “Talk of an imminent base rate rise has caused a surge in the demand for new mortgage deals.
“Lender’s 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.”