According to Moneyfacts.co.uk, the average fixed rate two year mortgage deal is now priced at 4.99 percent interest rate.

The figures released yesterday show that for the first time since June of this year the average interest rate on popular mortgages are priced below 5 percent – this is great news for the mortgage industry as a whole and a good indicator in the battle against the recession according to experts.

The financial website Moneyfacts.co.uk stated that borrowers would typically now be paying 4.99 percent for a two year fixed rate mortgage – quite a drop on the 5.21 percent back in July.

The reduction comes from a series of interest rate cuts from a number of banks and building societies in the last couple of weeks, such as C&G and the Abbey as the swap rates, the rates the money markets use to fund new mortgages, have gradually fallen.

Michelle Slade, of Moneyfacts.co.uk, the financial website, said: “Borrowers are finally starting to see more positive news coming out of the mortgage market. Falling rates on popular two year fixed rate mortgages, occurring against a backdrop of lenders raising the maximum LTV on their most competitive deals suggests that competition is increasing.

“Lenders have become accustomed to the post banking collapse world and appear to finally be relaxing their credit criteria while remaining within a regulated frame work. Swap rates have been falling over the last few weeks, but mortgage rates on medium term deals are yet to follow suit.”

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