The fall was driven by a decrease in fixed rates of 7 bps to 2.53%, and a drop in variable rates of 14 bps to 2.21%. The proportion of borrowers choosing fixed rates stayed constant at 82.3%.
Average rates on total amounts outstanding also fell to new record lows, dropping by 14 bps to 2.84% in Q3 2016.
The fall in interest rates corresponds with a 0.5% increase in lending at a loan-to-value of over 90%, which now stands at 4.6% of all lending.
Lending to borrowers with a single income multiple of more than 4.00x also increased by 0.5% to 10.6% in Q3.
In total, gross advances of £64.5 billion were recorded in Q3 2016 - 11.1% higher than Q2 and 3.9% higher than in Q3 2015.
However net advances fell from £13.7 billion in Q3 2015 to £13.1 billion in Q3 2016, a decrease of 3.9% over the previous four quarters.
New commitments also decreased from £68.1 billion in Q2 to £61.0 billion in Q3 - a decrease of 10.4% and a decrease of 4.8% compared with Q3 2015.
The proportion of lending to first time buyers stayed constant at 22.0% in Q3 2016 relative to Q2 2016.
The buy-to-let proportion of lending fell from 13.1% in Q2 2016 to 12.8% in Q3 2016. BTL advances (including remortgages) decreased from £9.7 billion in Q3 2015 to £8.3 billion in Q3 2016.
BTL balances outstanding were £192.2 billion in Q3 2016, which, at 15.4% of total residential balances is the highest proportion since the series began.
The proportion of remortgages decreased from 30.0% in Q2 2016 to 28.5% in Q3 2016.
