5-year fixes fall below 5pc
In the past 29 months since bank base rate has been on hold at a record low 0.50%, the average 5-year fixed mortgage rate has stood as high as 6.24% back in September 2009.
Based on a £150,000 repayment mortgage, the true cost over five years would be £7,020.
The average 2-year fixed mortgage rate has also fallen from 5.18% in September 2009 to 4.24% today, while the average 3-year fixed rate has fallen from 5.61% to 4.74%.
Michelle Slade, spokeswoman for Moneyfacts, said: “The cost of funding fixed-rate mortgages through the swap rate market has fallen to an all time low, and this is being passed on to borrowers through some of the lowest mortgage rates ever seen.
“Borrowers opting for the average 5-year fixed mortgage today would be paying £117 per month less than someone who secured the deal in September 2009.
“Lenders are trying to tempt borrowers off variable-rate deals and onto fixed-rate deals as they are concerned about some borrowers’ ability to repay their mortgages when rates finally start to rise.
“A proportion of borrowers on variable-rate deals will have absorbed the savings they have made from lower repayments into other monthly expenditure.
“For some of these borrowers affordability will become a problem when rates start to rise and lenders have to make provisions for the possibility that some borrowers may default on their mortgages.
“With fixed-rate deals the repayments remain the same and if the borrower’s circumstances remain unchanged then affordability isn’t an issue.
“With a rise in bank base rate looking unlikely in the short term, rates could fall further still.
“Once a bank base rate rise becomes imminent rates will quickly start to rise and if borrowers don’t act fast they will miss out on these all time low rates.”