The average two-year mortgage rate has dropped below 5% for the first time since former Prime Minister Liz Truss's mini-budget in September 2022.
The rate has dropped to 4.99%, according to Moneyfacts, which described it as a "symbolic turning point" for homebuyers and shows lenders are "competing more aggressively".
The news is part of an improving picture for the housing market, which Halifax said has been boosted by affordability improving.
Interest rates have been cut five times since last August but at the Bank of England's last meeting, a split vote between policymakers raised questions about whether there would be another reduction this year.
A Moneyfacts spokesperson said that although mortgages are following the "mood music" set by the Bank's rate cuts, they are unlikely to fall substantially.
Last week, the Bank of England revealed that inflation is forecast to spike higher than expected this year - at 4% in September - before falling back to its 2% in 2027.
Moneyfacts said this "is likely to mean the base rate will hold around its current level for longer" which, after the last cut, is 4%.
Average house prices ticked up by more than £1,000 in July to £298,237, mortgage lender Halifax said last week.
Although this is close to a record high, Halifax's head of mortgages, Amanda Bryden, told the BBC: "With mortgage rates continuing to ease and wages still rising, the picture on affordability is gradually improving."
She added: "Combined with the more flexible affordability assessments now in place, the result is a housing market that continues to show resilience, with activity levels holding up well.
"We expect house prices to follow a steady path of modest gains through the rest of the year."