The latest rate watch data from Moneyfacts shows the average two-year fix is now 5.65%, the three-year average is now 5.38% and the five-year average is 5.61%.

It follows multiple reductions over the past seven days including by major brands like Halifax, Lloyds and HSBC, as well as by many specialist and buy-to-let lenders.

Within individual product categories there have been some steeper falls.

The sharpest reduction was to three-year fixes at 70% loan-to-value, which fell 9bps to 5.65%, while five-year fixes at the same LTV dropped 5bps to 5.37%.

There was also some good news for borrowers with smaller deposits as two-year fixes at 90% LTV dropped 5bps to 5.89% and three-year fixes at the same LTV were down 4bps to 5.55%.

The average five-year equivalent also dipped by 3bps to 5.71%.

Moneyfacts head of consumer Adam French says: “Average new mortgage rates moved a little lower again this week, with higher loan-to-value products aimed at first-time buyers and home movers seeing some of the biggest falls.

“However, rates are still a fair bit higher than before the war in Iran. 

“The average two-year fixed mortgage rate stood at 4.83% and the average five-year fixed rate at 4.95% at the start of March.

“Some of the biggest falls in average rates this week were among higher-LTV products as lenders compete to attract new borrowers.”

He notes that 14 lenders lowered fixed rates compared with just one lender making a significant increase. 

Several lenders also launched new products at 90% and 95% LTV in a drive to attract more first-time buyers.

French adds: “Encouragingly for prospective buyers, the gradual easing in mortgage pricing comes at a time when both Halifax and Nationwide have reported modest month-on-month house price drops, with annual house price growth also slowing. 

“For prospective buyers in a strong financial position, the combination of weaker house price growth and improving mortgage rates may mean they are in a strong negotiating position when making a purchase.

“However, the picture is less rosy for sellers, particularly in London and the South East where affordability pressures were already weighing on demand before the economic disruption caused by the Iran conflict fed through into mortgage pricing.

“Higher borrowing costs continue to have an outsize effect on more expensive housing markets, where even small movements in rates can cause a sizeable shift in monthly repayments.”

Notable changes

• Coventry Building Society – Selected fixed rates reduced by up to 12bps.
• Darlington Building Society – Selected fixed rates reduced by up to 30bps; end dates extended.
• Foundation Home Loans – Fixed rates reduced by up to 15bps; selected Limited Edition products withdrawn.
• Gen H – Selected fixed rates reduced by up to 20bps.
• HSBC – Selected fixed rates reduced by up to 29bps; cashback incentives reduced.
• Halifax – Selected fixed rates reduced by up to 14bps.
• Leeds Building Society – Selected fixed rates reduced by up to 32bps.
• Lloyds Bank – Selected fixed rates reduced by up to 12bps.
• Loughborough Building Society – Selected discounted variable rates increased by up to 60bps.
• Newcastle Building Society – Selected fixed rates reduced by up to 34bps; end dates extended.
• Pepper Money – Selected specialist fixed rates reduced by up to 80bps.
• Santander – Selected fixed rates reduced by up to 17bps; maximum loan size increased on a selected product.
• Scottish Building Society – Selected fixed rates increased by up to 40bps.
• The Co-operative Bank for Intermediaries – Fixed rates reduced by up to 27bps; end dates extended.
• Vida Homeloans – Fixed rates reduced by 15bps; end dates extended.
• West Brom Building Society – Selected fixed rates reduced by up to 33bps; fees reduced on selected products; end dates extended.

Product launches, withdrawals and range changes

• Buckinghamshire Building Society – New Short-Term Lending discounted variable mortgage launched.
• Dudley Building Society – Existing intermediary range expanded and made available to all intermediaries rather than introducing new products.
• Foundation Home Loans – New fixed rate range launched following withdrawal of Limited Edition products.
• Hinckley & Rugby Building Society – New Skilled Worker Visa discounted variable mortgages launched (up to 95% LTV).
• Hodge – Criteria changes to existing range, including higher loan limits and wider remortgage availability.
• Loughborough Building Society – New retirement, near-prime, credit-impaired and credit-repair products launched. Lending into Retirement discounted variable product withdrawn and replaced with Borrowing into Retirement range.
• Newcastle Building Society – New fixed rate mortgage launched.
• Nottingham Building Society – New Life Happens fixed rate range launched.
• Scottish Building Society – New 95% LTV purchase-only fixed rate launched.
• Tipton & Coseley Building Society – New High Income Multiple discounted variable range launched.
• West Brom Building Society – New New-Build-only fixed rates launched.
• Yorkshire Building Society – End dates extended across range.