The average rate on a two-year tracker has fallen to 3.4 per cent, its lowest level since 1988, according to Moneyfacts.co.uk.
But the average two-year fixed rate has risen to 4.59 per cent, its highest level in ten months. Over the past year, the average shelf life has nearly halved from 27 days to 14 days.
Spokeswoman Michelle Slade says some borrowers have taken a “wait and see approach” over the last two years, preferring to remain on a lenders standard variable rate rather than move to a more expensive mortgage deal.
She says: “Talk of an imminent base rate rise has caused a surge in the demand for new mortgage deals. Lenders appear to be trying to tempt borrowers off record low SVRs on to new tracker deals instead.
“Rates on tracker deals continue to be more competitive than fixed rate deals, but borrowers need to ensure they factor in the effect of any base rate rises on their monthly repayment when considering a new deal.”