Data from Moneyfacts shows the rate on the average two-year fixed mortgage deal is now 2.25 per cent, down from 2.38 per cent in September.

Meanwhile, the average five-year fixed mortgage rate has fallen from 2.63 per cent last month to 2.55 per cent.

Eleanor Williams, finance expert at Moneyfacts, said: “As living costs are on the increase, it is good news that mortgage rates have continued to reduce.

“The average overall two- and five-year fixed rates are the lowest they have been in 13 months, fuelled by falls in the average rates across the majority of the loan-to-value (LTV) tiers.

“Borrowers now have the chance to secure lower rates than were on offer a year ago when the sector was being rocked by the pandemic.”

In further good news, competition is hotting up for all borrowers, not just those with the most equity or largest deposits.

The most dramatic month-on-month average rate cuts were for 90 per cent and 95 per cent loan-to-value deals, where the two-year fixed rates dropped by 0.29 per cent and 0.25 per cent to 2.56 per cent and 3.32 per cent respectively, according to Moneyfacts.

Over the weekend, a key bank of England policymaker hinted of a Bank of England base rate rise as early as this year.

Michael Saunders told the Sunday Telegraph: “I’m not in favour of using code words or stating our intentions in advance of the meeting too precisely, the decisions get taken at the proper time.

“But markets have priced in over the last few months an earlier rise in Bank rate than previously and I think that’s appropriate.”

An increase to the base rate would push up costs for millions of borrowers on variable mortgages.