The two-year fixed rate was the biggest driver, with average rates falling by 6 basis points last week and by 22 basis points over the month.
The latest weekly interest rate monitor figures from Moneyfacts show that prices continued to fall in most product categories.
In the past week, several major lenders, including NatWest, Barclays, HSBC, Halifax and Coventry, have introduced fixed interest rates of less than 4% over five years, joining Nationwide, which was the first to do so.
Two-year fixed rates
The average two-year fixed rate for all LTV levels has fallen 6 basis points since last Friday from 5.76% to 5.7%.
The overall average interest rate has fallen week after week and is now 22 basis points below the level of a month ago at 5.92%.
Last week, the two-year fixed interest rate in the 50% LTV band experienced the strongest decline: by 22 basis points to 5.54% since last Friday.
Rates in the 70% LTV segment also fell significantly this week by 12 basis points to 5.95%.
Three-year fixed rates
For all LTVs, the average has fallen by 5 basis points to 5.47% since last Friday.
Compared to a month ago, when the average three-year interest rate was 5.63%, it is now 16 basis points lower.
The 100% LTV band saw the sharpest week-on-week decline in average rates, down 16 basis points from 5.11% to 4.95%.
At an LTV of 60%, there was also a significant decrease in the average interest rate, by 8 basis points from 5% to 4.92%.
Five-year fixed rates
The average five-year yield fell another 4 basis points to 5.33%, after falling by the same amount the week before.
Looking back to a month ago when the average was 5.5%, interest rates are now 17 basis points lower.
The strongest decline over the past week occurred at the 50% LTV level, where rates fell 19 basis points to 5.2%
Ten-year fixed rates
There was no change in the average ten-year yield, which remained at 5.93% for three consecutive weeks.
This followed a weekly decline of 8 basis points from 6.01% in the week leading up to July 19.
‘Lenders are catching up with base interest rates’
Moneyfacts finance expert Rachel Springall says: “This week the mortgage market caught up with the base rate cut, with more cuts to trackers and SVRs, but there were also more lenders cutting fixed rates, including more fixed deals below 4%. .”
The biggest rate cuts included cuts of up to 70 basis points by Saffron, up to 60 basis points by Precise, up to 52 basis points by Coventry and up to 40 basis points by Darlington Building Society and by Bluestone.
“It is a promising sign for borrowers to see more rate cuts from some of the country’s largest lenders as they compete with each other to lure new customers. Swap rates are lower than they were a month ago, and this, combined with the recent cut in base rates, may prompt lenders to cut mortgage rates.
“Two weeks ago, Nationwide became the first lender to offer a mortgage below 4% for the first time in months, closely followed by NatWest last week, and HSBC, First Direct, Barclays, Coventry, Halifax and Lloyds joined this week join the fight.”