Yorkshire Building Society (YBS) has introduced a five-year product fixed at 4.99%, while rival providers have also lowered their costs.
The reductions, however, could be short-lived as another Bank of England base rate increase is predicted for this Thursday.
Here, Which? takes a closer look at the new YBS deal and how mortgage rates have fluctuated over the past two months.
Yorkshire launches 4.99% mortgage deal
The building society has laid down the gauntlet to other lenders by being the first to offer a five-year fix under 5% since the start of the summer.
Available to both purchasers and remortgagers, the new 4.99% deal requires a 25% deposit or equity. So, a borrower with 25% of the purchase price saved up or who owns 25% or more of their home can be eligible.
Find out more:Other lenders introduce price cuts
Over the past week, a host of other banks and building societies have reduced the interest rates on some of their mortgage products.
Big-name providers such as Virgin Money, Halifax, Barclays and Nationwide have also lowered rates. In cutting the rates on some products by 0.1%, Barclays said last week that it was 'taking advantage of recent falls in the cost of market funds'.
YBS also mentioned the 'favourable market swap rates' as the key reason for the building society lowering its rates.
Find out more:What's happening to mortgage rates?
The graph shows how the average rates for two-year and five-year fixes have changed since the start of July, according to Moneyfacts.
Will mortgage rates continue to fall?
For the coming weeks and months, it's hard to tell if rates will begin to drop more substantially or even increase again.
A further Bank of England base rate rise is expected this Thursday (21 September) - with it expected to rise to 5.5%. However, this isn't for certain, and opinion is split as to what the outcome will be.
Due to this, there is uncertainty as to whether lenders have factored another potential base rate rise into their recent mortgage rate pricing.
After Thursday, we might begin to get a clearer picture of what direction rates will head in. But even if the base rate doesn't rise, don't expect significant movement in mortgage rates.
While we now have a 4.99% deal on the market, it's unlikely lenders will be offering any sub-4% in the near future.
Find out more:How to find the right mortgage deal
Having grown accustomed to low-interest rates over the past 15 years, choosing the right deal in a high-interest environment can be difficult.
If you're comparing deals yourself, you should always keep an eye on the full cost, and not just the initial rate.
Take your time and shop around before settling. Some borrowers prefer to take out a loan with a bank they already have a current account with, but this can be a costly mistake if it doesn't offer competitive rates.
However, do not feel pressured to stay with them, as you can switch to a different provider and lock in a rate six months before your current term expires.
Find out more:source https://www.which.co.uk/news/article/yorkshire-building-society-launches-sub-5-mortgage-are-rates-going-down-agw8m4b2Cgj7