Average fixed rates have fallen significantly over the last four months, according to Moneyfacts.

The financial information provider said that the cost of deals has decreased by over 0.50% since March.

The cuts follow the Bank of England Base Rate having been cut to an all-time low of 0.10% in response to the Covid-19 crisis.

Fee-free deals on offer

Plus, there’s now a greater proportion of deals on offer that charge no fee, or offer an incentive, as lenders look for different ways to appeal to borrowers – including cutting upfront costs.

Eleanor Williams, finance expert at Moneyfacts.co.uk, said: “The average rate charged on fixed rate products with no fee has reduced by 0.52% since March this year, and the equivalent average for deals with a fee has dropped by an even larger 0.59%, sitting at 2.28% and 2.30% respectively. The average standard variable rate (SVR) that customers may revert to at the end of a deal now sits at 4.48%, having decreased by 0.42% since the start of March.

“The potential savings for those looking at a new deal are clear, as those remaining on their SVR could be paying out as much as £182.58 more per month than those who have secured a new deal.

“Borrowers are likely to want to keep a close eye on their monthly outgoings and reduce costs where possible at the moment. It should then come as good news to consumers that we are seeing stability in the proportion of fixed rate mortgage deals that carry no fee and growth in the proportion that offer an incentive package. These changes suggest that despite operational difficulties and economic uncertainty, lenders are not just competing on rate, but are also tailoring their overall packages to entice borrowers too.”