Fixed rates down to seven-year lows

THE cost of the average two-year fixed-rate mortgage has tumbled to its lowest level since September 2003.

The average two-year fix now stands at 4.52 per cent as lenders seek to tempt borrowers off cheap standard variable rate (SVR) mortgages and trackers, according to Moneyfacts. The lowest two-year fixed-rate mortgages currently available include deals from the Co-operative Bank at a rate of 2.95 per cent and HSBC at 2.99 per cent.

Three-year fixed rates have fallen to 4.16 per cent, the lowest since May 2009, while the average five-year deal is the lowest for a year at 5.61 per cent.