TSB moved to cut selected residential rates by 25 basis points shortly after the Bank of England’s base rate hold, while earlier in the day digital lender MPowered Mortgages reduced rates by 12bps. 

The high street bank says its changes, which come to market tomorrow (22 September), cover: 

• Two-year fixed-rate house purchase deals at 75% to 95% loan to value, reduced by up to 25bps 
• Three-year fixed-rate house purchase and remortgage offers, reduced by up to 20bps 
• Five-year fixed-rate house purchase loans, reduced by up to 20bps 

At noon today, the BoE’s Monetary Policy Committee released its surprise decision to hold the base rate at 5.25%, in a narrow 5-to-4 vote, following the last rise on 3 August.   

Many economists expected a further 0.25% hike before the committee would consider how it previous 14 consecutive rate rises were feeding through the economy, as it battles inflation.   

The cost of living unexpectedly slowed to 6.7% in the 12 months to August yesterday – down slightly from 6.8% in July. 

Earlier in the day, MPowered Mortgages said its prime residential two-year fixed-rate loans had come down by up to 12bps. 

Its two-year fixed product without an arrangement fee, now starts at 6.07%, for both purchases and remortgages.   

Rates on its three-year fixed products have also been reduced by as much as 10bps.  

For purchasers paying an arrangement fee of £2,495, rates begin at 5.54% for purchasers and 5.49% for remortgages. For purchasers and remortgagers who do not pay an arrangement fee, rates start from 5.89% and 5.94%, respectively.    

The firm has also cut all of its rates on its five-year fixed range, with rates for purchasers beginning at 5.24%, and rates for remortgagers beginning at 5.29% – both with a £1,999 arrangement fee.  

On five-year fixes without an arrangement fee, rates start at 5.44% for purchases and 5.49 for remortgages.     

MPowered Mortgages chief executive Stuart Cheetham says: “Given the swap markets are beginning to stabilise for now and with inflation decreasing to 6.7% in August, we are optimistic that a more stable economic landscape will help drive activity in the mortgage market throughout the remainder of the year.”