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Tracker Mortgage Rates Hit Record Low

The cost of the tracker mortgages fell to a record low in September as competition continued to return to the market, Bank of England figures showed today.

The average rate fell to 3.55 per cent, the lowest level since Bank records began in 1997.There was also a further decline in the interest on five-year fixed-rate mortgages. September was the tenth consecutive month in which rates on the products have improved or stayed the same.Homeowners with a 25 per cent deposit who took out a fixed-rate deal in September typically paid 5.06 per cent, a level last seen in May 2009.But the figures showed that the cost of two-year fixed rate mortgages rose slightly during the month, edging ahead to 3.79 per cent 3.74 per cent in August.

Mortgage rates are falling steadily as competition continues to increase, with a number of high-profile lenders cutting their rates in recent weeks. However despite the gradual improvement in rates, the margins lenders charge on home loans remain high by historical standards.