Nationwide and peers are cutting fixed-rate mortgage deals across two-, three-, five-, and 10-year terms, with a notable 3.64% two-year fix for 40% deposit borrowers and a £1,499 fee.

The rate reductions come as lenders respond to shifting BoE rate-cut expectations and broader market dynamics, with multiple banks trimming deals in quick succession.

Average mortgage rates have dipped below 5% for the first time since September, though experts warn that inflation remains sticky and budget uncertainty could limit sustainability of the dip.

Inflation currently stands at 3.8%, the highest since January 2024 and above the 2% target, contributing to policy uncertainty.

Labour market signals are mixed: unemployment edged up to 4.8% in August, while September payrolls fell by about 10,000, underscoring cautious economic momentum.

With inflation elevated and growth uncertain, policy decisions remain in play as markets anticipate potential rate moves.

The market environment remains favorable for borrowers, supported by ongoing rate adjustments and evolving loan terms amid inflation and growth uncertainty.

Experts urge homeowners to lock in deals sooner rather than later to shield against potential volatility in borrowing costs ahead of budget-related moves.

Policy signals from the Chancellor favor room for rate reductions to curb inflation and spur growth, while BoE officials warn against keeping policy too tight for too long.

Chancellor Reeves signals alignment with easing, supporting conditions that could enable lower rates to help living costs and growth.

The broader picture combines bank-led rate competition with cautious central-bank policy, shaping borrower decisions and market expectations.

Analysts note rapid rate declines and heightened competition, prompting borrowers to act quickly before further improvements fade or offers expire.