The lowest rates now stand at 3.99% and this compares to 4.33% for a two-year fixed rate with the same LTV.

Commenting on the latest figures Moneyfacts finance expert Rachel Springall said: “Fixed mortgage rates are on the downward trend, which will be a relief to borrowers looking to refinance. There is still much more room for improvement, but it has taken a few months for the lowest fixed mortgage rates to drop below the 4% mark. However, as it stands five-year fixed mortgages are lower than a two-year equivalent, so any borrowers unsure on which to choose would be wise to seek advice to go through their options.”

She added that since the start of 2024, mortgage rates had been volatile, and in the past few weeks lenders had been reacting to changing swap rates. “Mortgage rates could fall further, but it is difficult to tell how quickly and by what margins.

“Typically, a brand with a large presence in the market that cuts rates can encourage other lenders to review their rates to compete, so as the lowest five-year rates have edged closer to 4% from some of the biggest high street brands (Halifax, Lloyds Bank, Barclays Mortgage, NatWest), the market did appear on course to reveal a sub-4% deal.”

“Borrowers sitting on the fence may remain patient for a little while longer. However, on the flip side, those who feel this might now be their chance could see if they can lock into a deal early, as some lenders will let borrowers do this from three to six months in advance.

She added: “Those waiting for the Bank of England to cut base rate may be crossing their fingers for August, but this has split opinions among economists who are now pointing towards September at the earliest due to stubborn service inflation.”