LONDON (Reuters) - The average rate on popular two-year fixed mortgages has fallen back to pre-credit crunch levels, easing the financial pressure on some overstretched homeowners, financial data group Moneyfacts said on Tuesday.

The average rate for two-year fixed loans is now 6.39 percent, "around the same level seen just prior to the onset of the credit crunch," in August last year, Moneyfacts analyst Michelle Slade said in a statement.

The latest average is down sharply from a peak of 7.08 percent on July 11 this year, when the gap between the Bank of England base rate and the average two-year mortgage rate was the widest on record.

The BoE base rate is used as a benchmark in the wholesale money markets for two-year swap rates, used in turn by banks to finance two-year mortgages.

The decline in the average two-year loan rate reflects a steady decrease in the corresponding swap rate from a peak of 6.52 percent on June 16, and will mean cheaper deals for homeowners who need to remortgage.

"The decrease in borrowers' monthly repayments should not be as much as it would have been had they remortgaged two months ago, which will hopefully mean more borrowers can afford to stay in their homes," Moneyfacts' Slade said.

"Only time will tell if we have finally turned a corner, but this is the most prolonged period of cuts we have seen since the credit crunch began."

The abrupt rise in mortgage costs in the wake of the credit crunch is seen as a key factor in the current housing market downturn.

The government earlier on Tuesday introduced measures aimed at boosting the slumping housing market. These included a cut in the waiting period before income support for mortgage interest is paid to 13 weeks from 39 for new working age claims from April 2009.

The capital limit for new claims will also be increased to 175,000 pounds from April 2009.