Nationwide Building Society is leading the charge, offering a 3.99% five-year fix and cutting other fixed deals by up to 0.25 percentage points.

This follows similar moves by other major lenders, driven by competition and hopes of falling interest rates. The drop in rates could save borrowers hundreds of pounds a month, providing relief for those facing higher repayments as they come off old deals.

While fixed rates are declining, Nationwide has increased the margin on some of its variable rate tracker deals.

The Bank of England’s next interest rate decision in August could see the base rate cut, potentially leading to further reductions in mortgage rates. However, some economists predict that the Bank of England may not cut rates until September.

Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “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.

“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.”