The momentum of price cuts by lenders slowed this week as the market took a breather ahead of an expected fall in the Bank of England’s base rate next Thursday, Moneyfacts analysis showed.
Overall, the average fixed rate showed little movement over the past seven days, although some lenders made cuts and others increased prices.
Week on week, the average two-year interest rate fell 1 basis point to 4.84%, while the average three- and five-year interest rate remained flat at 4.75% and 4.91% respectively, the comparison website said.
Within the individual product categories, the biggest movement was the average two-year fixed rate at an LTV of 60%, which fell by 4 basis points to 4.27%.
The two-year fixes at an LTV of 70% fell by 3 basis points to 4.77%.
In most other categories, averages fell by one basis point or remained unchanged from the previous week.
Moneyfacts product expert Caitlyn Eastell says: “The momentum of interest rate movement has slowed since last week but remains positive as most lenders have reduced their fixed interest rates.
“As we enter the new year, it is encouraging to see product availability well above 7,000, indicating a promising start to 2026.
“However, borrowers needing to remortgage in 2020 should be prepared for a jump in their monthly repayments, but with many lenders improving their interest rates, this could be less of a pressure compared to the start of the year.
“This week’s cuts include some significant reductions in Progressive Building Society by up to 50 basis points and Precise by up to 37 basis points.
“A handful of the largest lenders have also made some rate changes, including Lloyds Bank, Halifax, Virgin Money, Santander, Royal bank of Scotland, NatWest, Gen H and Barclays Mortgage.
“The leading fixed rate is still held by Santander, but the interest rate has been reduced to 3.51% for two years.”
Eastell added: “It is widely expected that the Bank of England could cut rates to 3.75% on December 18, and many borrowers will breathe a sigh of relief.
“In recent weeks, many lenders have already priced in the cut. Even with today’s surprising GDP figures, swap rates have shown little movement and remain below their highest levels in 30 days.”