The average interest rate for 2-year fixed rate products was 3.99%. This is 0.53% lower than February last year but continues a steady climb from the 12-month low of 3.82% witnessed in October 2011.
The cost of 3-year fixed rate products witnessed subtler changes with an increase of only 0.04% to 4.30% from the previous month.
This remains close to the 12-month low for 3-year fixes at 4.25% witnessed in September 2011.
5-year fixed rates also increased 0.04% to 4.61% on a monthly basis. These deals remain close to the record low for 5-year fixed rates of 4.57% seen last month. On a year-on-year basis, the average rate for 5-year fixes was 0.89% lower than February 2011.
3-year trackers remained cheaper than 2-year trackers in February and have been since September 2011.
The average rate of 3-year trackers was 3.53% and the average rate of 2-year trackers was 3.43%, up 0.21% and 0.13% respectively from January.
The increase in average 2-year tracker rates was the highest monthly increase seen over the past 12 months.
Paul Hunt, managing director of Phoebus Software, said: “As LIBOR has crept up steadily since the final months of 2011, lenders have been forced to increase their rates but so far they have done so only modestly, meaning now is still an excellent time to acquire affordable finance.
“That lenders continue to offer historically highly competitive mortgage rates is an indicator of their commitment to moving the market forwards, supporting borrowers to the greatest possible degree.
“The proof is in the pudding: yesterday the Council of Mortgage Lenders announced a 10% increase in mortgage volumes, with six consecutive months of annual rises. This demonstrates the extent to which lenders are taking action to pass savings to borrowers.
“Despite facing a hefty headwind in the shape of wholesale lending prices, mortgage lenders are demonstrating they have the stomach to boost market activity.”
