The average two year fixed rate mortgage stands at its lowest level in 12 months with longer fixed rates not far behind, according to Moneyfacts.
Despite lenders taking much higher margins for risk when the rate first fell, those margins have fallen steadily since.
The average two year fixed rate sits at 4.63 per cent against 5.21 per cent in August 2009, with five year fixed rates averaging 5.85 now in contrast with 6.24 per cent last August.
Competition continues to return to the mortgage market, as the number of mortgages available reaches 2,076, the highest level since December 2008 and a 71.7 per cent increase since the all time low level of 1,209 seen in April 2009.
A significant proportion of the new mortgages now available are for those with smaller deposits, which is another welcome boost for the mortgage market.
Michelle Slade, spokesperson for Moneyfacts.co.uk, said: “Lenders have slowly become acclimatised to a new look mortgage market and continue to take more steps to improve the competitiveness of deals.
“A 25 per cent deposit remains the benchmark for the majority of the most competitive deals. However, borrowers with a small deposit are increasingly getting access to a wider proportion of the market.
“The platform is developing for a resurgence in the mortgage market, but lending figures show that there is still a way to go before the market returns to any sort of normality.”
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