Get the best deal in the low rate mortgage environment

The average mortgage rate for new borrowers has fallen 1.3 per cent over the past 12 months to 5.12 per cent, but in this low rate environment does this constitute a good deal for consumers?

With Bank of England Base Rate at its lowest level ever, many lenders have failed to reduce their deals for new customers. For example, Northern Rock's average mortgage rate dropped 0.27 per cent compared to Alliance & Leicester which fell by 2.30 per cent.

Commenting on these rate changes, Hannah Skenfield, mortgage channel manager at moneysupermarket.com, said: "The Bank of England Base Rate has dropped by 4.5 per cent since August last year, however despite this low rate environment there is a significant disparity in the amount of this saving being passed on to mortgage borrowers by the main UK lenders."

"This further illustrates the divorce between mortgage rates and the Base Rate and with the variance in average rates offered this year widening to 2.5% compared with just 0.93% in 2008, shopping around for the best deal is more important than ever before."