Lenders tried to entice homeowners to remortgage in October with further UK mortgage rate drops, a report has found.
The Bank of England revealed that the cost of a tracker loan hit a new record low of 3.5% after dropping for the third consecutive month.
Interest rates fell to their second lowest level since 1995 for people with a two-year fixed rate deal who put down a 25% deposit. The average cost for a five-year fixed rate mortgage also dropped by 0.19% to five-year low of 4.85%.
Despite the mortgage rate declines, the swap rates, which fixed rate loans are partially based upon, finished October slightly higher than they started it.
Industry experts believe the declines have been fuelled by an increased competition among lenders as they try to get homeowners to remortgage of low standard variable rates (SVRs).
A number of lenders have launched deals in recent weeks that are specifically aimed at people who are remortgaging.
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