Major lenders, including NatWest and Nationwide, slashed interest rates on fixed mortgages as they bet on falling inflation

Major lenders including NatWest, Nationwide and Coventry Building Society have cut interest rates on fixed mortgages as they bet on inflation falling.

All six of the country’s largest lenders, including Barclays and Lloyds Banking Group, cut their rates last week, marking the fourth week in a row that mortgage prices have fallen.

Lenders, including Barclays and Yorkshire Building Society, cut their rates by as much as 0.61 percentage point on fixed-rate residential mortgages yesterday.

The official inflation numbers released this morning are expected to boost hopes that households will feel some respite from the pace of eye-watering price increases.

Inflation fell to its lowest level in 15 months in June and is expected to have fallen further in July.

(File photo) Lenders like Barclays slashed rates as much as 0.61 percentage points on fixed-rate residential mortgages as they bet on falling inflation

But the Bank of England is expected to continue raising interest rates, having raised rates to a 15-year high of 5.25 percent earlier this month. This means that mortgages probably won’t continue to fall every week.

Prime Minister Rishi Sunak yesterday said there was “light at the end of the tunnel” in his plan to cut inflation in half and that lowering inflation was the “best way” to lower interest rates.

There have been warnings of a slowdown in the housing market due to the cost of living crisis, forcing providers to lower prices as competition for good deals heats up.

News of cuts will be welcomed by 1.3 million borrowers facing the end of an existing fixed-rate home deal this year as they feared a huge rise in their mortgage payments.