The cost of fixed rate mortgages has fallen to its lowest level since 1988.

According to figures released today, the average cost of a two-year fixed rate mortgage fell by 0.08% to 4.4% in September.

Similar falls were recorded in the cost of 3 and 5 year fixed rate deals, which reduced to an average of 5.04% and 5.36% respectively.

The decreasing costs of fixed rate mortgages is great news for mortgage borrowers, although anyone looking to take advantage of the low rate mortgage deals needs to move quickly as the current record lows are not expected to last very long, as UK banks & mortgage lenders are expected imminently to embark on a new round of criteria-tightening.

The price of fixed rate mortgages has fallen for people looking to buy a new home or those looking for mortgage refinance as the 'swap rates' which dictates the the cost of fixed funds to the banks have themselves recently decreased sharply.

In October 2008, the cost of two-year swap rates (which largely determines the price of two-year fixed rate mortgages) was 5.26% and today is it just 1.29%.

The latest improvement in the cost of a two year fixed rate mortgage deal was driven by a slight fall in the margins lenders are charging on the loans during September.

However, Moneymatchmaker reminds borrowers that there is still a big difference in the price charged to borrowers with a big deposit and those needing to borrow a high percentage against the value of their property.

Amongst the best UK mortgage deals on offer through Moneymatchmakers mortgage brokers, there is a 2 year fixed rate mortgage deal currently on offer which is charged at 2.89% for people with a 40% deposit. The best mortgage deal on offer currently for borrowers looking for a 90% mortgage against the value of their property is 5.19% fixed for 2 years.

More information a quotes for the best fixed rate mortgage deals is available at Moneymatchmaker.com.