Lenders made plenty of mortgage rate cut announcements this week, but among the reductions, average rates in some loan-to-value tiers edged upwards.

Across all LTV tiers, three-year fixed and five-year rates both dipped by 2bps and two-year rates by just 1bp, according to the latest Moneyfacts ratewatch data.

Average two-year fixed rates now stand at 5.05%, three-year rates at 4.93% and five-year rates at 5.03%.

The biggest movement was to five-year fixed rates at 100% LTV, which dropped by 11bps to an average of 5.89%.

However, as this is a category with relatively few products available on the market, movements by a single lender can have a big impact on the average.

Looking at more mainstream options, three-year fixed rates at 70% LTV also saw a significant fall of 9bps, taking the average to 5.28%.

In the same LTV tier, the average five-year fixed dropped by 6bps to 5.47%.

Two-year fixed rates at 60% and 70% LTV both reduced by 4bps to stand at the same average of 6.01%.

But there were also some notable increases at 90% LTV with the average five-year fixed rising by 6bps to 5.81% and two-year fixed by 5bps to 6.25%.

Substantial rate cuts by major lenders

Moneyfacts finance expert Rachel Springall says: “Fixed rate mortgage cuts took precedence this week, with some of the biggest banks and building societies in the country reviewing their offers.”

Prominent brands to reduce selected fixed rates this week included Barclays by up to 54bps, TSB by up to 20bps, Lloyds Bank by up to 10bps, HSBC by up to 10bps, Halifax by up to 15bps, Santander by up to 16bps and NatWest by up to 13bps.

Among the building societies to reduce rates were West Brom by up to 33bps, Nationwide by up to 11bps, Leeds by up to 40bps, Cambridge by up to 25bps, Skipton  by up to 26bps, Newcastle by up to 30bps and Furness by up to 16bps.

Other lenders to drop rates included Clydesdale Bank by up to 26bps, Virgin Money by up to 19bps and The Co-operative Bank for Intermediaries by up to 27bps, she says.

Positive outlook for market

Springall adds: “The outlook for the mortgage market looks promising, spelling good news for the millions of borrowers due to refinance this year.

“The volatility in swap rates has led to several lenders making fixed rate cuts this week, with the two-year swap rate steering lower than its five-year equivalent.

“Today marks a rise in the loan-to-income rules threshold, up to £150m a year from £100m which was set back in 2014.

“These changes are expected to benefit 80 lenders.

“Not only this, but with the overall review into lending ongoing, the PRA is offering a ‘modification by consent’ that will allow lenders to disapply the 15% limit.

“We are also expecting news on the new mortgage guarantee scheme, and this coupled with relaxation to lenders’ stress test rules should be a great combination to first-time buyers in the months ahead.”