Mortgage rates hit record lows across all types of deal saving buyers hundreds on their property purchase 

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Mortgage rates for both fixed rates and trackers have fallen to their lowest levels since 2007.

Data from the Mortgage Advice Bureau shows there have been record cuts on rates in the past three months. 

The broker's National Mortgage Index shows borrowers can now save up to £600 on a standard fixed rate mortgage compared to the deals available in October.

Good signs: Mortgage rates have fallen to record levels

Mortgage rates have been cut to record levels in recent months as banks aim to meet end of year targets and the prospect of an interest rate rise moves further away.

Borrowers across all deposit levels can now access some of the cheapest ever deals on the market. 

Using data from Moneyfacts.co.uk dating back to 2007, the Mortgage Advice Bureau has found the average two-year fixed rate fell 27 basis points in the three months to November to 3.44 per cent.

Three-year rates fell to a historic low of 3.52 per cent while even tracker deals have come down to a new record average of 2.38 per cent.

Tracker rates dropped by 28 basis points in the three months to November 2014, the biggest autumn price cut on record for these products.But its not just falling rates that have benefit borrowers. 

The falls on mortgage rates may even be of more benefit to buyers than recent high profile reforms to stamp duty.  

Chancellor George Osborne scrapped the slab system for stamp duty in his Autumn Statement and instead buyers will pay stamp duty progressively from 0 per cent up to £125,000; 2 per cent to £250,000; 5 per cent to £925,000; 10 per cent to £1.5million and 12 per cent above that.

Based on an average loan size of £158,791 and average purchase price of £227,619, Brian Murphy of the Mortgage Advice Bureau said a buyer would pay £2,276 in stamp duty under the old system and will now pay £2,052: a saving of £224.

However, shopping around for the best mortgage deal will have more of an effect on the overall cost of your property purchase, as the table below shows.

The mortgage price drop from October to November will save the typical borrower £463 in repayments over the initial term of a three-year fixed rate on the same loan size, compared with the £224 stamp duty saving.

The saving on a five-year fixed rate deal, coupled with stamp duty, adds up to £632, while those on a two-year fix would make a bigger saving on stamp duty than on the rate they pay for their mortgage.

Brian Murphy, head of lending at Mortgage Advice Bureau, said: ‘The recent changes to stamp duty are undoubtedly a coup for the majority of would-be owners, making significant reductions to the cost of buying a home. However, perhaps without realising, many have already been experiencing bigger savings in the form of falling mortgage rates.

‘This emphasises the benefit of securing a competitive rate, as doing so can save hundreds of pounds in the long run.’

Where are the best rates?

40 per cent deposit

For a short term rate, Yorkshire Building Society has a two-year fix at 1.39 per cent with a £975 fee.

A 25-year £150,000 mortgage would have monthly repayments of £612 and cost £15,682 over two years.

HSBC has a five-year fixed rate at 2.48 per cent with a £999 fee. A 25-year £150,000 mortgage would cost £691 a month and £42,497.50 over five years.

25 per cent deposit

For a two-year fix, Chelsea Building Society has a rate of 1.59 per cent with a £1,675 fee.

You would pay £626 a month and £16,719 over two years on a £150,000 mortgage.

If you want to fix for longer, The Post Office has a five-year fixed rate at 2.75 per cent with a £1,495 fee. You would pay £712 a month on a 25-year £150,000 mortgage and £42,918 over five years.

10 per cent

The Post Office has a two-year fixed rate at 2.95 per cent with a £995 fee for those with a small deposit.

The monthly repayments on a 25-year £150,000 mortgage would be £727 and £18,452 over two years.

Furness Building Society offers a low five-year fixed rate of 4.09 per cent with a £999 fee.

A 25-year £150,000 mortgage would cost £818 a month and £50,105 over five years.

5 per cent

You could get a 5 per cent deposit mortgage under the government-backed Help to Buy scheme.

The Post Office has a low fee-free two-year fixed rate at 4.75 per cent and a five-year rate at 5.45 per cent.

A 25-year £150,000 mortgage would cost £873 a month and £20,972 over two years.

Outside of the Help to Buy scheme, Monmouthshire Building Society offers a fee-free five-year fixed rate at 4.59 per cent.

The 25-year £150,000 mortgage would cost £841 a month and £50,485 over five years.