The ongoing rate war has seen the cheapest five-year fixed rates fall by as much as 150 basis points over the past year.
Mortgage Brain, a mortgage technology firm, says the cheapest five-year fixed rate to 90 per cent LTV fell by over a third from 4.29 per cent on 2 May 2014 to 2.79 per cent on 1 May this year. Based on a mortgage of £150,000, that represents an annual saving of £2,250.
The cheapest five-year fix at 60 per cent LTV fell by 95 basis points to 1.99 per cent over the same period. The annual saving comes in at £1,425.
Trinity Financial products and communications manager Aaron Strutt says: “When you can take a five-year fix at around 2 per cent, they are going to be incredibly popular and lenders have access to cheap funding at the moment.”
Rate falls for other types of mortgage have been smaller over the past year.
For two-year fixes, the outcome is mixed, with the cheapest 60 per cent LTV product down 30 per cent but the cheapest 90 per cent LTV product up 8 per cent year-on-year.
The cheapest two-year fixed rate at 60 per cent LTV was 1.48 per cent on 2 May last year, falling 30 basis points to 1.18 per cent at 1 May this year. It has since fallen again to 1.07 per cent.
But when it comes to the cheapest 90 per cent LTV two-year fix, the rate increased by 20 basis points to 2.69 per cent over the year to 1 May.
Most of the cheapest trackers have also fallen, albeit to a lesser degree.
The cheapest five-year tracker at 60 per cent LTV fell by 20 basis points to 3.19 per cent in the year to May, although the cheapest at 90 per cent LTV remains 3.65 per cent.
The cheapest two-year tracker at 60 per cent LTV fell by 50 basis points to 0.99 per cent over the past year, while the cheapest at 90 per cent LTV fell by 16 basis points to 2.29 per cent.
Mortgage Brain chief executive Mark Lofthouse says: “It seems that experts have been predicting a rise in interest rates for years, and yet mortgage rates continue to fall.
“Although our comparisons are based on figures between May 2015 and May 2014, more recent figures from three and six months ago show no sign of bucking the trend either, with continued falls being seen across the board.”