The cost of retail mortgages fell by 0.15% in May from April, standing at 3.81%,.
The index combines the product fee with the initial interest rate to produce a percentage figure based on an advance of £150,000 over the initial rate period, or three years for term products.
The true cost index fell to 85.5 in May.
Sylvia Waycot, editor at Moneyfacts.co.uk, said: “The average true cost of a mortgage fell during the month of May thanks to a short-term improvement in wholesale funding as a result of the fluctuation in SWAP markets.
“As speculation on a base rate rise becomes even stronger, expectations are that pressure will mount on fixed rates to increase in the near future.”
Rates decreased across fixed and variable ranges, yet fixed 5-year deals rose by 0.01%.
The number of fixed rate mortgages decreased, yet the market saw 54 new 5-year fixed rate products and 11 new 3-year variable mortgages.
