Could this be the start of a downward spiral?

• HSBC has announced a wave of rate cuts from tomorrow
• Barclays has cut its fixed rate for house and flat buyers, including new best buys
• NatWest has cut rates on these remortgages – with some of the best buys too

Three major lenders have cut mortgage interest rates, which could be the start of a decline in home loan prices.

Today Barclays cut rates on a number of mortgage deals aimed at home buyers following NatWest’s cut on Friday.

HSBC has also announced that it will cut rates on its mortgage and buy-to-let mortgage products from tomorrow.

These rapid rate cut announcements by the big three banks are fueling suggestions that other lenders will follow suit and revise prices downwards.

Fixed mortgage rates have been falling slightly since February, but attention now turns to when the Bank of England will start cutting interest rates.

Last week, the Bank of England again decided to keep the base rate at 5.25 percent.

With inflation now back at the central bank’s 2 percent target and CPI inflation forecast to fall slightly below the 2 percent target next month, this could pave the way for the central bank to start cutting rates.

Markets are currently pricing in one or two rate cuts in 2024, with the first coming in either August or September.

If the forecasts are correct, this could mean the prime rate will drop from 5.25 percent to 4.75 percent by the end of 2024.

Nicholas Mendes, mortgage technical manager at broker John Charcol, said: “We can expect lenders to significantly step up their strategies over the next few weeks.

“Following last week’s Monetary Policy Committee (MPC) decision and with important wages data and general election results on the horizon, markets are likely to expect further cuts in bank rates.

“On Friday, the five-year cash rate was at 3.82 percent, suggesting that lenders certainly have room to cut five-year fixed rates even further from their current levels.”

“With lenders having recently raised prices, there is now potential for a reduction.

“We have seen some movement, but this latest price from HSBC will certainly stimulate the market.”

“The timing of competitor pricing similar to that at the beginning of the year is likely to be from next week, given the upcoming announcements.”

Which mortgage rates have changed?

While we’ll have to wait until tomorrow to find out the extent of HSBC’s latest revaluation, Barclays and NatWest are now offering some of the cheapest deals on the market.

Barclays’ lowest five-year fix, aimed at those buying with at least a 40 per cent deposit, charges 4.23 per cent with an £899 fee. This is the new best buy.

The average five-year fixation is currently 5.53 percent. This means that someone needing a £200,000 mortgage who is able to secure Barclays’ lowest offer over 25 years will end up paying £1,081 a month, compared to the market average of £1,232.

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Those buying with a 25 per cent deposit can secure a rate of 4.38 per cent with Barclays for an £899 fee.

For a buyer with a deposit of 40 per cent or more, Barclays is also now home to the lowest two-year fix – 4.68 per cent with an £899 fee.

Those buying with a 25 per cent deposit can secure a two-year fix at 4.75 per cent with Barlclays, also a best buy.

Simon Bridgland, mortgage broker at Release Freedom, told Newspage: ‘Barclays have launched some hot fixed rates to match the start of the long-awaited summer sunshine.

“More lenders will follow suit this week with their rates melting in the heat. Things seem to be heating up not only in our skies, but also in mortgage rates.

“Expect lower fixed rates to continue to emerge in the coming days.”

Meanwhile, NatWest has focused on these remortgages. For someone with at least 40 per cent equity in their home, NatWest offers rates from 4.36 per cent – lower than any other lender.

Its lowest two-year fixed rate, aimed at those remortgaging with at least 40 per cent equity in their home, is 4.82 per cent – ​​joint lowest on the market alongside Santander.