The price of an average two-year fixed-rate mortgage has fallen to its lowest level since the credit crunch accelerated last year, suggesting conditions in some areas of the market may be easing.

The average interest rate on a two-year fixed-rate mortgage has dropped from a peak of 7.08 per cent at the beginning of July to 6.39 per cent, based on research by Moneyfacts.co.uk, the financial website.

According to Moneyfacts.co.uk, the last time the two-year rate reached this low was in July 2007, before Northern Rock was forced to borrow £26 billion from the Bank of England and the wholesale funding market that funds the banking system seized up.

A number of mortgage providers are now offering cheaper deals.

Lloyds TSB and its mortgage lending arm Cheltenham & Gloucester as well as Abbey and the Royal Bank of Scotland are cutting fixed rates this week and other leading providers are expected to follow suit.

The reduced deals have been announced a day after Prime Minister Gordon Brown announced a £1 billion package of measures to breathe life into the mortgage market, including £600 million to fund a temporary suspension of stamp duty for homes under £175,000.

However, mortgage experts say the latest rate cuts have little to do with the Government package.

Instead, they say lenders have been lining up to cut rates on their fixed-rate mortgage deals because inter-bank swap rates, which dictate the cost to funding fixed-rate mortgages, have been falling steadily since June.

Ray Boulger, of John Charcol, a broker, said: "The expectation continues to be that the base rate could fall more quickly and sooner than expected, that is why swap rates have fallen so sharply and that is how lenders have been able to cut rates."

David Hollingworth, of L & C Mortgages, another broker, said: "The very best rates are still only available to those with the biggest deposits. However, the outlook is more positive than in recent weeks.

"Rates are coming down and, more encouragingly, lenders are beginning to compete with each other for the best buy position."

Skipton Building Society has announced an unusual new deal aimed at first-time buyers. The Mutually Exclusive mortgage, which is available from September 15, requires only a 5 per cent deposit, but also an additional investment from parents.

On a £100,000 property with a 95 per cent mortgage, for example, Skipton will require parents to deposit £20,000 of savings with the building society. In the event that the lender needs to repossess the home, it could use this cash to cover the shortfall between the sale price of the property and the size of the loan.

The deal can apply to any mortgage in the Skipton range. A three-year fixed-rate deal from the building society is currently available at an interest rate of 6.6 per cent and a fee of £995.

Michelle Slade, of Moneyfacts.co.uk, said: "This deal is still likely to be out of the reach of many customers as families still need to secure 25 per cent of the value of the property. During the term of the deal, you can not get access to those savings as it is used as a guarantee against the mortgage. This may pose a problem if access is required."