ANALYSTS have announced that there may never be a better time to take out a mortgage, with figures showing that rates have nearly halved over the past 12 months.

With lenders amidst an ongoing mortgage price war potential borrowers could use the next six months to their advantage when looking at buying a property.

The rate war is showing no sign of dwindling any time soon and with various new lenders entering the market, competition is heating up.

Over the next few weeks, rates could reach levels that may not be seen again for an extremely long time.

Data released by the Bank of England shows that the typical two-year fix has dropped from 2.37 to 2.01 per cent over the past 12 months.

On a loan worth £200,000 with a 25 per cent deposit, this would save a buyer £420 per year.

Whilst it is looking like these rates may be around for a while, they could vanish as quickly as they appeared so the Mortgage Advice Bureau is recommending that property buyers seek the advice of a professional mortgage adviser.

Head of lending at Mortgage Advice Bureau, Brian Murphy, commenting on the low level of rates, said: “Today’s prices have never been bettered in modern times and given that a base rate rise is inevitable at some point, it is unlikely they will be surpassed in the years ahead.

"Lenders have begun the year with a strong appetite for growth, and newcomers are going head to head with established names to launch attractive new deals."

One of the reasons mortgage rates have dropped is due to lenders attempting to play “catch-up” after the introduction of the Mortgage Market Review (MMR) in April 2014 and the Loan-to-Income cap (LTI) in October 2014.

With the new tougher lending rules, there was a slight slowdown in the amount of lending as lenders got to grips with the changes.

The number of home loans fell by more than a fifth in November when compared to January 2014 and lenders are now trying to recoup some of the business lost towards the end of last year.

Banks and building societies are also finding that they have surplus money due to the Funding for Lending scheme.

Launched in 2012, the scheme allows banks and building societies to borrow cheaply from the Bank of England on the condition that they then use some of the money to offer mortgages to home-buyers.

With the current low level of inflation and the Bank of England concerned that lifting the Bank Rate would destabilise Britain’s ongoing recovery, it is looking increasingly more likely that interest rates will not increase until sometime in 2016.