"It is encouraging to see that potential first-time buyers could be benefiting from some healthy competition between mortgage providers and being aided by reduced mortgage rates."
Despite the Bank of England rate rise of 0.25% to 0.75% in August 2018, the average two-year fixed mortgage rate has fallen by 0.03% from 2.53% in August 2018 to 2.50% today, according to data from Moneyfacts.
Furthermore, its figures show that the average two-year fixed rate at 90% LTV has fallen by 0.07% to 2.68% over the same period.
Within this, the average rate offered by building societies stands at 2.62% - 0.06% below the sector average - while the average rate offered by non-mutuals is currently 2.79%, 0.11% above the average.
Darren Cook, finance expert at Moneyfacts, said: “There clearly seems to be a concerted drive by both building societies and non-mutuals to try and secure the mortgage business of potential first-time buyers, who are the lifeblood of the property market. It is encouraging to see that potential first-time buyers could be benefiting from some healthy competition between mortgage providers and being aided by reduced mortgage rates.
“Building societies not only have tailored underwriting processes that may suit first-time buyers, but the average two-year fixed mortgage rate at max 95% LTV offered by building societies is currently 3.35%, 0.10% lower than the average offered by other mortgage providers. Moving away from the higher tiers however, the average rate for max 60% LTV offered by building societies is currently 1.95%, 0.09% higher than the non-mutuals.
“Further still, 113 products – 31% of all products available – at maximum 90% LTV two-year fixed are available through building societies, with the remaining 257 (69%) offered by other mortgage providers. At the maximum 95% LTV tier, however, 82 products (43%) are offered by building societies and 110 products (57%) are available through the rest of the market, again showing building societies’ willingness to compete for the business of first-time buyers.”