The average level of mortgage interest has fallen below 5 per cent for the first time since June, confirming that fears over increasing more rates were unwarranted at this stage. According to mortgage market research by Moneyfacts.co.uk, borrowers will pay 4.99 per cent on a two-year fixed-rate home loan .

The news follows a peak of 5.21 per cent in July, when mortgages were at their most expensive. Thankfully, for many borrowers on cheap tracker or variable rate mortgages, repayments remained low. This recent fall in cost shaves around 300 pounds per annum off the cost of monthly mortgage repayments .

Michelle Slade of Moneyfacts was reported as commenting: Borrowers are finally starting to see more positive news coming out of the mortgage market. Falling rates on popular two year fixed rate mortgages, occurring against a backdrop of lenders raising the maximum LTV on their most competitive deals suggests that competition is increasing. Lenders have become accustomed to the post banking collapse world and appear to finally be relaxing their credit criteria while remaining within a regulated frame work.