Mortgages at record low

The downward momentum on mortgage rates appears to have continued into June, with a flurry of lenders slashing their rates during the past few days, including big names on the high street such as Halifax, Nationwide, Lloyds TSB and NatWest. 

The interest charged on short-term fixed rate mortgages fell to a record low during May as lenders passed on reductions in their own funding costs to borrowers, new figures show. 

The average cost of a two-year fixed rate deal dropped for the third consecutive month, falling by 0.19% to stand at 3.47%, according to the Bank of England. 

Interest charged on tracker mortgages remained at a record low of 3.45%, while there was also a fall in the cost of five-year fixed rate deals, with the cost of these now averaging 5%.