Financial data providers Moneyfacts noted today that average rates on two-year and five-year fixed rate residential and buy-to-let mortgages had fallen as a result of changes from a number of lenders.

HSBC reduced rates across a wide range of products including first-time buyer and remortgage. The bank has also reintroduced its cashback incentive across a selection of UK residential first-time buyer and homemover ranges.

Mortgage brokers said they hoped the move could lead other high street lenders to further lower rates.

Jamie Lennox, director at Dimora Mortgages, said: “Hopefully this will spark a rocket within the other big six lenders who were fast to increase rates but seem to be dragging their heels on bringing them back down again.

Nationwide and TSB lower rates

Meanwhile, Nationwide has also lowered selected fixed mortgage rates by as much as 0.55%. The largest rate reductions have been applied to mortgages targeted at first-time buyers, such as the fee-free three-year fixed product at 60% loan to value (LTV), which has been cut from 6.64% to 6.34%. 

Henry Jordan, director of home at Nationwide Building Society, said: “These latest changes build on the reductions we made last week for existing customers.  

“With swap rates having fallen from their early July peak and stabilised somewhat, we are now able to reduce rates for new customers.” 

TSB has also confirmed that it is making reductions to selected five-year fixed residential products by up to 0.4%. Rates for the updated products will start from 5.44%.

And Halifax today announced that it would cut select two, five and 10-year fixed rates by up to 0.71 per cent, with the changes coming into effect from Friday.

Rates could continue to fall

While average rates are still well over the 6% mark, mortgage experts have highlighted that rates should continue to come down.

Bloomberg Intelligence said the “modest decline” in mortgage rates which had been seen in recent weeks could “offer some respite” to the market.

The firm suggested that the market’s prediction for the base rate peak had lowered from around 6.4% in June to 5.7% more recently, which could go some way to lessening the impact of high interest rates on the housing market.

Iwona Hovenko, real estate analyst at Bloomberg Intelligence, said: “Tentative signs of easing cost pressures, with inflation slowing more than anticipated and the labour market also softening – as unemployment unexpectedly increased in June – could support some pull-back in rate views, in turn driving mortgage rates lower.”