Price comparison website Moneyfacts found that mortgage rates are back to where they were at the onset of the credit crunch.
The average rate on a two-year fixed deal is now 6.59 percent – almost the same as 6.56 percent in August 2007 and down from 7.08 percent in early July.
However, the costs associated with mortgages remain high.
The better rates are only available to those with big deposits and lenders are also charging higher fees.
Moneyfacts said that the average mortgage arrangement fee was £803 in August 2007 but is now £964.
Moreover, there is less competition in the marketplace, with only 3,748 products on offer compared with 13,027 in August 2007.
Borrowers are also required to put down much higher deposits than a year ago. An average of 20 percent is now the norm, Moneyfacts says.
The news follows gross mortgage lending in the UK economy showing signs of a slight recovery during July, according to the latest figures from the Council of Mortgage Lenders (CML).