While the best rates are still restricted to borrowers with big deposits there is hope that the new rate cuts might herald an easing of current lending restrictions and better times for would-be homeowners lie ahead.

Louise Cuming, moneysupermarket.com’s head of mortgages, said: “We are in the midst of a mortgage crisis, yet three quarters of the nation’s biggest lenders have recently slashed rates on deals. For such a significant proportion of mortgage providers to drop their rates underlines an industry wide recognition that rates were too high.

“This is good for borrowers who can take heart in some positive news – a rarity during the current credit crisis. I am also pleased see lenders making a real effort to make borrowing more affordable.”

She added: “Lenders, of course, are cherry picking which customers they offer the lowest rates to, meaning the gap between the ‘haves’ and ‘have nots’ in the UK is set to widen further.”

Skipton Building Society is starting its new ‘Mutually Exclusive’ mortgage deal next week, which is offering a home loan to people with a five per cent deposit if their parents or another close relative put savings equalling 20 per cent of the asking price into a savings account in the building society.

However, as the family is not allowed to touch the savings until the mortgage is paid off or the buyer has built up enough equity in the house the offer has been criticised as effectively requiring a 25 per cent deposit mortgage.

As to tracker mortgages, Halifax is introducing a ‘Rate Guard’ to all of its core tracker deals. The new feature allows borrowers to switch to a fixed rate product within 12 months after taking their mortgage out without any penalty which enables people to safeguard themselves against rising rates and be reassured they can fix at all times.

Switching options are completely flexible as customers do not have to pay any early repayment charge on the tracker, and they can choose from Halifax’ entire range of fixed-rate products being limited by any LTV rules or charged an extra premium added to fixed rates.

Jaedon Green, head of acquisition for Halifax, commented: “Borrowers can be forgiven for not knowing whether to fix or track in the current market. This new addition to our range delivers the best of both worlds, allowing customers to select a tracker with confidence, knowing that they can switch to a fixed rate should rates reduce, or if their personal circumstances change.”

© Fair Investment Company Ltd