The good news though is that best-buy variable deals have fallen from 4.4% in March to 3.4% now for borrowers with a deposit of 25%.
And realpricecomparison.com believes lenders still have a long way to go with rate cuts despite recent high-profile announcements from the likes of Nationwide, Northern Rock, Abbey, Alliance & Leicester, the Post Office and Cheltenham & Gloucester.
Its analysis shows the cheapest fixed-rate deals were available in May and June with average two year deals hitting a low of 3.52% while three-year deals were at their lowest in June at 4.02%. The rates on five-year deals have consistently crept up since March.
Francis Ghiloni, Commercial Director at realpricecomparison.com said: "The recent round of rate-cutting is very welcome as it confirms that lenders are now starting to compete again on price.
"There still appears to be plenty of room for manoeuvre though and lenders have a long way to go before rates are even back to where they were in March particularly on fixed rate deals. Borrowers are paying a high price for certainty by opting for fixed-rate deals currently.
"The FSA’s mortgage market review has heralded a return to sensible affordability rules and it is clear that at 75% LTVs lenders can afford to cut rates while still being entirely responsible."
Lenders who have cut recently include Woolwich which reduced rates on fixed deals by up to 0.6% – the fourth reduction it has made in the past two months. Nationwide has reduced by up to 0.5% and Northern Rock by 0.4%.
The lowest tracker and discount rates currently at 75% LTV come from HSBC and ING Direct with rates ranging from 3.1% to 3.8%. Best deals on fixed rates include Mansfield Building Society, RBS, NatWest, Darlington Building Society, Chelsea and Britannia.
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