Competition in the mortgage market is picking up again, with several major lenders trimming fixed-rate deals in recent weeks.

Halifax, HSBC, Nationwide and Santander are among the lenders to announce fresh rate reductions during May, particularly for borrowers with larger deposits. The cuts suggest lenders are becoming more confident about pricing after a turbulent spring for the mortgage market.

Average mortgage rates, though, still remain relatively high by recent standards. According to Moneyfacts, the average two-year fixed deal is currently around 5.75%, while the average five-year fix is just below 5.7%.

Lenders remain particularly active in the remortgage sector as millions of homeowners continue reaching the end of older fixed-rate deals agreed when borrowing costs were much lower.

Some buy-to-let and specialist lenders have also started reducing selected products again after repricing heavily earlier this year, although rates for landlords remain noticeably higher than they were before the sharp rises in interest rates seen since 2022.

The outlook, though, for borrowers remains uncertain despite a sharper-than-expected fall in inflation this month. The Office for National Statistics said inflation dropped to 2.8% in April from 3.3% in March, increasing market expectations that the Bank of England could begin cutting interest rates later this year.

At the same time, however, rising oil prices following the escalation of the Iran conflict, expectations of another increase in the energy price cap in July and stubborn wage growth have led economists to warn inflation pressures may not ease as quickly as hoped. That is likely to keep mortgage pricing prone to regular changes over the coming months.

Below is a selection of this month’s best buys from Moneyfacts.co.uk (remortgages):

Two-year fixed rates: 4.64% from first direct. Product fee £490. 60% LTV.
4.68% from Nationwide BS. Product fee £999. 60% LTV.

Five-year fixed rates: 4.70% from first direct. Product fee £490. 60% LTV.
4.4% from Nationwide BS. Product fee £999. 60% LTV.

Discounted variable: 4.09% From Ecology BS for 2 years. Product fee £0. 80% LTV.br> 4.24% From Bath BS For 2 years. Product fee £999. 80% LTV.

BUY-TO-LET (BTL)

Best two-year fixed rate: 4.50% from Birmingham Midshires. Product fee 1.0% advance. 65% LTV.

Five-year fixed rate: 4.58% from NatWest. Product fee £995. 65% LTV.

Best Discounted variable: 4.49% For 2 years. From Furness BS. Booking £995. 75% LTV.

The information we provide is our personal opinion and should not be relied upon for financial advice. Should you need financial advice or guidance please contact an appropriate professional.