Mortgage rates have fallen to their lowest level ever

Average mortgage rates have fallen to their lowest levels ever, particularly within the fixed rate market bringing some welcome news to thousands of frustrated borrowers who have previously found themselves priced out of the market.

According to research by Moneyfacts.co.uk, five-year fixed rates have dropped from 6.00% in February 2010 to 4.14% today, marking a 1.86% fall. In the two-year fixed market, the average rate has fallen from 4.82% to 4.11% over the same period.

Going back even further to their launch in 1989, the average two-year fixed rate stood at 12.83%, highlighting how far down rates have come in the past twenty-four years.

The figures will come as a welcome relief to thousands of frustrated borrowers, who have found themselves priced out of the market.

Record low mortgage rates are mainly thanks to the Government's £80 billion Funding for Lending Scheme. Launched in August last year, the scheme intends to encourage lending to households and small non-financial businesses, whilst providing a boost to the ailing mortgage and housing markets.

Sylvia Waycot, finance expert at Moneyfacts.co.uk, said: "At last we have some good news to talk about with regards to finance; fixed mortgage rates are coming down.

"Of course, this doesn't mean it will be any easier to get a mortgage approved, you will still need to have a clean credit record, income sufficient to not only pay today's mortgage rate but also potential future increases and of course the stickler for most, the deposit.

"But if you can satisfy the banks' lending criteria and have a deposit or equity from a current house, then there are some amazing offers to be had," she concluded.