2-year fixed rate average below 5%, says Moneyfacts

Date:Tuesday 24th November 2009
Author: Susanna Kavka

The average rate for a two-year fixed mortgage has fallen to 4.99 per cent, according to Moneyfacts.com.

This is the first time the average rate has gone below five per cent since June 2009. The average rate peaked at 5.21 per cent at the end of July.

Michelle Slade, spokesperson for the website, said: "Falling rates on popular two-year fixed-rate mortgages, occurring against a backdrop of lenders raising the maximum loan-to-value on their most competitive deals suggests that competition is increasing."

She stated she believed that providers are beginning to take more risks on their lending, which will ease the credit criteria for borrowers.

For those looking to pay their mortgage back over three years, there has not been such good news, as fixed-rate figure currently stands at 5.58 per cent.

The financial advice site stated earlier this month that the number of mortgages requiring ten per cent deposits had risen from 89 to 105 between March and November of this year.