Fixed mortgage rates at lowest level for over 20 years (but you still need to find a deposit) Fixed rate mortgages are at the lowest level since 1989 Around 80 per cent of buyers opt for a fixed rate mortgage Cheap rates have been fuelled by the government's £80billion 'Funding for Lending' scheme Homeowners are benefiting from the cheapest fixed rate mortgages since they were introduced in 1989, a report revealed today. The research, by the financial information firm Moneyfacts, said the cost of these hugely popular types of home loans are "dropping like stones." At present, around 80 per cent of people who buy a home or remortgage their existing loan opt for a fixed rate deal. The government are hoping to kick start lending and encourage first-time buyers to get onto the property ladder The cheap mortgage boom is being fuelled by the Bank of England and the Government's £80billion scheme to kick start lending. Critics have raised fears the "Funding for Lending" scheme is helping mortgages, while there is no evidence that the money is getting to cash-strapped small firms. The average two-year fixed rate mortgage currently charges just 4.11 per cent, with some of the best loans offering a rate of below two per cent. By comparison, the average two-year fixed rate mortgage charged 12.83 per cent in 1989, according to Moneyfacts. Sylvia Waycot, editor of Moneyfacts, said: "Fixed rate mortgage rates are dropping like stones. More and more homeowners are benefiting from cheap fixed-rate mortgages as a result of the governments scheme Rates started a slow descent shortly after the Funding for Lending scheme began last August, and have picked up speed. "New "best ever" deals are coming onto the market almost daily." The Council of Mortgage Lenders said recently there was a "discernible" increase in lending to people with small deposits, more than five years after the credit crunch began. "Less than one in 100" first-time buyers took out a mortgage deal which required a five per cent deposit at the end of 2011, but this has jumped to one in 40 today. Ray Boulger, from the independent mortgage broker John Charcol, said: "The mortgage market is open for business. Borrowers who, just a year ago, couldn't get a new mortgage should try again now. Overall, the CML said yesterday gross mortgage lending was £10.4billion last month [jan], which is three per cent lower than in January last year. Caroline Purdey, an analyst at the CML, said: "House purchase activity was robust into the start of 2013, on the back of better mortgage availability and pricing. We share the Bank of England's confidence that this will continue over the coming months. But Mrs Waycot warned: "[The cut in fixed rate mortgages] does not mean it will be easier to get a mortgage approved. You will still need to have a clean credit record, income sufficient to not only pay today's mortgage rate but also potential future increases and, of course the stickler for most, the deposit.