More rate cuts for small deposit borrowers are set to be on their way as lenders turn their attention to higher loan to value mortgages when reducing rates.
The Rightmove weekly mortgage tracker has found that the biggest rate cut since last week was a 0.1 per cent reduction on two-year fixed deals at 95 per cent loan to value.
The average rate for this option fell from 5.62 per cent as of April 4 to 5.52 per cent as of April 12.
The five-year fixed alternative saw a smaller reduction from 5.07 per cent to 5.06 per cent.
There are now nine lenders offering five-year fixed-rate deals below four per cent
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Mortgages at other LTV tiers also declined but by a smaller margin, with the average rate for a two-year fix at 90 per cent loan to value fell by 0.04 per cent to 5.14 per cent this week, while the equivalent average five-year fix dropped by 0.03 per cent to 4.75 per cent.
At 85 per cent loan to value, the average two-year fixed rate is currently 4.89 per cent, down from 4.91 per cent last week and the average five-year fixed rate is 4.5 per cent, down from 4.53 per cent.
The average rate for a two-year fix at 60 per cent fell by 0.02 per cent to 4.5 per cent, while for a five-year fix, this dropped by 0.01 per cent to 4.17 per cent.
The rates are based on products across 95 per cent of the mortgage market excluding specialist lenders, with fees of around £999.
Matt Smith, mortgage expert at Rightmove, said: “Average rates have crept down again this week, but the pace of change has dropped a little, with the biggest week-on-week reduction being 0.1 per cent for 95 per cent two-year fixed deals.
“This lull is likely to be a combination of the Easter break limiting activity, and lenders taking stock following a very active period of price cuts across the market.”
He added: “We can probably expect a similar pattern in the coming week, although there are increasing signs of competition at lower LTVs.
"There are now nine lenders offering five-year fixed-rate deals below four per cent at 60 per cent LTV, and two lenders now offering a sub-four per cent five-year fixed rate to those with a 25 per cent deposit."
“This is the first time that a high-street lender has offered a 75 per cent LTV rate below the four per cent mark since mid-September last year.”
Nationwide Building Society are said to be cutting its fixed mortgage rates
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Since the release of the data, Nationwide Building Society is said to be cutting its fixed mortgage rates by up to 0.3 percentage points for new and existing borrowers with low amounts of equity or a small deposit.
The move follows a trend of fixed-rate cuts by a string of lenders in recent weeks, despite a quarter percentage point rise in the Bank of England Bank Rate to 4.25 per cent last month.
Included among the reductions from Nationwide, which are effective from Friday April 14, are a five-year fixed-rate mortgage at 4.44 percent and a two-year fix at 5.29 per cent
First-time buyer deals have also been cut by up to 0.2 percentage points.
