Mortgage competition hots up as interest rates decision looms

The prospect of a lower Bank of England rate has offered better signals for lenders’ funding costs, leading many to lower the rates they charge customers.

They will also study the moves of their rivals, and their own levels of custom, to judge where they set the costs.

Many major banks have cut rates in the last two weeks, including Barclays which has done so three times, as well as Nationwide, Virgin, Coventry and Skipton, among others.

Aaron Strutt from mortgage broker Trinity Financial said there was “more positive news” coming from lenders. He suggested anyone who had recently agreed a new deal might still have time to renegotiate something better.

While the moves have led some to suggest sub-4% deals could return to the market soon, others are more cautious.