Average rates on fixed rate mortgage deals have decreased by over 0.5 per cent in the last four months, according to Moneyfacts research.

Following to Bank of England base rate cuts and a reduction in the number of high LTV mortgage deals available, the average for both products with fees and those without have reduced significantly.

Moneyfacts says that some borrowers may be concerned that in order to secure one of these low rate deals, there would be a significant initial outlay to cover at a time when disposable income may be hard to find.

However, Moneyfacts figures show that the proportion of the market that includes deals that carry no fee and those that offer incentive packages have increased.

Moneyfacts finance expert Eleanor Williams says: “Fixed rates have dropped to attractive lows over recent weeks. The latest Moneyfacts.co.uk data shows that the average rate charged on fixed rate products with no fee has reduced by 0.52 per cent since March this year, and the equivalent average for deals with a fee has dropped by an even larger 0.59 per cent, sitting at 2.28 per cent and 2.30 per cent respectively.

“The average standard variable rate (SVR) that customers may revert to at the end of a deal now sits at 4.48 per cent, having decreased by 0.42 per cent 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. Another consideration for those debating whether or not to look for a new mortgage deal is that the low initial rates we are currently seeing may potentially increase once lenders are able to return traditionally higher rated, higher LTV products to their ranges.

“However, caution is understandable at a time when many have been hit by a fall in their income levels due to furlough, redundancy or unemployment. Borrowers are likely to want to keep a close eye on their monthly outgoings and reduce costs where possible at the moment. Therefore, there may be mortgage borrowers who want to take advantage of this low rate environment to remortgage, but are hesitating due to concerns around taking on any additional expenses, such as paying a product fee or having to find the funds to meet other set-up costs such as legal fees or valuation expenses.”