The Bank of England held interest rates at 4.25 per cent this month after inflation failed to come down as much as hoped in May, falling by just 0.1 per cent to 3.4 per cent.
Barclays cut its two-year fixed rate for those with a 40 per cent deposit or equity to 3.88 per cent, with a fee of £899, while TSB cut rates on some of its shared ownership products. Halifax, Skipton Building Society and Accord also made reductions.
Banks and building societies base their own interest rates on the Bank of England’s base rate. If the Bank reduces the rate, mortgage lenders tend to follow suit, and vice versa.
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Experts say mortgage rates could fall well below 4 per cent in the second half of this year if the Bank does continue to cut rates as expected.
David Hollingworth, associate director at L&C Mortgages, said lenders are trying to make cuts where possible, and more big lenders reducing rates could spur others to follow suit.
Thomas Lambert, financial planner at Quilter, said: “If inflation continues to ease and the Bank follows through with those cuts, then we could see mortgage rates gradually fall further as we head into the second half of the year.
“That means the path for mortgage rates is still uncertain, and we’re likely to see a bit of a mixed picture for a while.”
The Bank of England kept the base rate at 4.25 per cent in JuneThe conflict has led to a significant rise in oil prices, which could have a knock-on impact on petrol and food prices, driving up inflation.
For borrowers coming to the end of a fixed deal this year, experts say now could be a good time to start exploring options.
You can generally lock in a fixed mortgage deal between three and six months in advance, but you can switch to a better deal later if rates fall in the interim.
“There may be better deals available now than a few months ago, and shopping around or speaking to a mortgage adviser could be worthwhile.
“Just bear in mind that the outlook could shift quickly, depending on what happens in the wider economy.”
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