The mortgage price war continues to heat up, with four more lenders cutting rates in hopes of lowering interest rates.
TSB and Santander are the latest big names to reveal a fall in borrowing costs, easing the pain for home owners and first-time buyers.
Mortgage rates remain high as the Bank of England has raised the base rate several times in an attempt to tackle inflation
The prime rate is used by banks to set interest rates for loans, including mortgages.
Since August last year, it has remained at 5.25%.
Millions of homeowners have faced higher rates after stepping down from deals they originally set when rates were low, and first-time buyers are finding it harder to get on the property ladder.
But after it was revealed that inflation remained at 2% in June – the second month in a row – there are expectations that the Bank of England could cut interest rates on August 1.
This has prompted lenders to cut rates, with the biggest banks often changing their mortgage products.
Santander has cut its rates for the second time this month, with fixed rates cut by up to 0.14% and tracker rates by 0.15%
Meanwhile, TSB announced mortgage cuts of up to 0.2%.
For the second time in a week, small lender MPowered Mortgages has cut rates by as much as 0.25%.
In addition, Yorkshire Building Society has cut mortgage rates by up to 0.25% for the second time in two weeks.
The exact rates you get can depend on a number of factors, including your income, the amount you’re borrowing, and your credit score, among others.
Competition in the mortgage market is increasing as lenders compete for customers.
Last week’s wave of rate cuts brought good news for homeowners and first-time buyers who have been hit by rising interest rates.
First Direct, Nationwide and Coventry Building Society all cut their rates last week.
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Halifax, HSBC UK, Barclays, Santander, NatWest and Yorkshire Building Society were among those to shake up their ranges just a week earlier.
Simon Bridgland, director of Release Freedom, said: “The regular flow of rate cuts is keeping the market very positive as it braces for the inevitable cut in base rate.”
While Rohit Kohli added: “The consensus seems to be that inflation will stick to 2% and if that’s the case, there will be pressure on the Bank of England to cut rates in August.”
The average two-year fixed home mortgage rate today is 5.91%, according to Moneyfacts.
The average five-year fixed home mortgage rate is 5.49% today
Today’s average two-year tracking rate is 5.94%.
How to get the best mortgage
IF you’re looking for a traditional type of mortgage, getting the best rates depends entirely on what’s available at the time.
There are several ways to get the best deal.
Usually, the bigger your deposit, the lower the rate you can get.
If you’re remortgaging and your loan-to-value (LTV) ratio has changed, you’ll get access to better rates than before.
Your LTV will decrease if your outstanding mortgage is lower and/or the value of your home is higher.
Changing your credit score or getting a better salary can also help you get better rates.
And if the end of a fixed contract is coming soon, it pays to look for new offers now.
You can lock in current deals sometimes up to six months before the end of the current deal.
Leaving a fixed contract early usually comes with an early exit fee, so you want to avoid these extra costs.
But depending on the costs and how much you could save by switching versus staying, it could be worth paying to leave the store – but compare the costs first.
To find the best deal, use our mortgage comparison tool to see what’s available.
You can also contact a mortgage broker who can compare a much wider range of offers for you.
Some will charge an extra fee, but there are plenty who give free advice and only receive a commission from the lender.
You’ll also need to factor in mortgage fees, although some have no fees at all.
You can add the fee – sometimes more than £1,000 – to the cost of your mortgage, but be aware that it means you’ll be paying interest on it, so it will cost more in the long run.
Use the mortgage calculator to find out how much you can borrow.
Remember that you will also need to meet the lender’s strict eligibility criteria, which will include a credit check and a look at your credit file.
You may also need to provide documents such as utility bills, proof of benefits, payslips for the last three months, passports and bank statements.