The average three-year fixed rate fell by 5 basis points over the past week to 5.28%, as 20 lenders responded to lower interest swaps by cutting rates.
The latest Price Watch data from Moneyfacts also shows that the average two-year interest rate fell by 4 basis points to 5.55% and the five-year interest rate fell by 2 basis points during the week to 5.54%.
Some loan-to-value levels saw steeper cuts.
The average three-year LTV at 65% fell by 18 basis points to 4.7%, and the average two-year LTV at 50% fell by 14 basis points to 4.99%.
For borrowers with small deposits, there was some welcome news, with the average two-year fixed rate at 95% falling from 6.2% to 6.15%, and the 90% rate falling from 5.83% to 5.77%.
Moneyfacts financial expert Rachel Springall says: “Building societies have been dominated by mortgage interest rate cuts this week, making waves to compete with attractive offers as well.
“Alongside the moves, major mainstream banks were also making cuts, which is great news for borrowers.
“Twenty different lenders were cutting their fixed mortgage rates this week.
“Among the largest mainstream banks, Barclays made cuts of up to 20 basis points, with NatWest cutting up to 26 basis points and HSBC also cutting up to 10 basis points.”
Springall welcomes moves by some building societies to lower interest rates on high LTV deals.
“First-time buyers remain the lifeblood of the mortgage market, so any interest rate cuts, fee reductions or incentive packages can really help them save on the overall cost of the deal,” she says.
“Skipton Building Society has made cuts of up to 30 basis points, with its 95% deal reduced by 12 basis points to 5.19% fixed for two years, securing its position as a Moneyfacts Best Buy.
“Swap rates have fallen over recent days, so it is somewhat inevitable that we will see lenders making efforts to re-price their fixed mortgages, so it was a positive week overall.”
But Springall warns: “The current situation does not rule out the possibility of a policy rate hike from the Bank of England if inflationary pressures worsen, so hesitation in making a decision could be the biggest enemy for borrowers this year.”
Price cuts this week:
- Agreement Home Loans: Discounted by up to 18 basis points
- Barclays Mortgage: Reduced by up to 20 basis points
- Coventry Building Society: Reduced by up to 42 basis points
- Darlington Building Society: reduced by up to 20 basis points and increased by up to 10 basis points
- First Direct: Reduced by up to 16 basis points
- Generation H: Reduced by up to 15 basis points
- HSBC: reduced by up to 10 basis points
- Kensington: reduced by up to 30 basis points
- Leeds Building Society: reduced by up to 16 basis points
- LiveMore Capital: Reduced by up to 10 basis points
- Nationwide Building Society: reduced by up to 25 basis points
- NatWest: reduced by up to 26 basis points
- NatWest Intermediary Solutions: Speed reduced by up to 26 bps
- Pepper Money: reduced by up to 71 basis points
- Emirate Building Society: Reduced by up to 50 basis points
- Royal Bank of Scotland: reduced by up to 26 basis points
- Skipton Building Society: reduced by up to 30 basis points
- Tipton & Coseley Building Society: Reduced by up to 14 basis points
- TSB: Reduced by up to 30 basis points
- Yorkshire Building Society: Reduced by up to 14 basis points
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