Major price cuts by lenders caused the average mortgage rate on two-, three- and five-year fixed rates to fall by 3 basis points this week.
The latest interest rate monitoring data from Moneyfacts shows that the average mortgage interest rate for a two-year term is now 4.92%, for a three-year term it is now 4.84% and for a five-year term it is now 4.98%.
Among the categories that saw the sharpest declines were the average five-year fixed rate at 50% loan-to-value, which fell by 7 basis points.
The two-year fixed rate with an LTV of 50%, 60% and 75% all fell by 6 basis points.
The three-year fixes at 60% and 65% LTV fell by 5 basis points, as did the two-year fixes at 75% LTV.
There was also good news for borrowers with small deposits, as the average five-year fixed rate with a 90% LTV fell by 4 basis points.
In many other product categories, the average interest rate fell by 1 to 3 basis points.
The whole average mortgage interest rate also reduced below 5% to 4.98%.
Lenders cutting rates this week included Virgin Money by up to 33 basis points, TSB by up to 15 basis points, Royal Bank of Scotland and NatWest by 9 basis points, Lloyds Bank by 9 basis points and Halifax, which made two cuts to selected fixed rates this week – first by 20 basis points, then by 9 basis points.
Santander also reduced selected interest rates by up to 10 basis points.
Building societies making price cuts included West Brom by up to 18 basis points, Coventry by 25 basis points, Leeds by 20 basis points, Principality by up to 13 basis points, Nationwide by 25 basis points, Melton by up to 20 basis points, Furness by up to 9 basis points, Family by up to 15 basis points and Newcastle Building Society by up to 20 basis points.
Other notable rate cuts included April Mortgages, Clydesdale Bank and LendInvest, which cut fixed rates by 11 basis points, 30 basis points and 15 basis points respectively.
Moneyfactscompare.co.uk spokesperson Caitlyn Eastell said: “Activity in the mortgage market has increased this week, with some major lenders implementing significant discounts, but building societies have been the most active.
“Only two lenders have increased interest rates this week.”
Eastell added: “As inflation remains stubborn, it is not entirely surprising that the Bank of England has voted to keep the base rate at 4%.
“However, we are seeing many lenders reducing their fixed rate offerings as they are more closely tied to swap rates, which are currently around 30-day lows.
“This could be particularly encouraging for borrowers taking out shorter terms, as they could see their monthly repayments drop significantly.