Santander has kicked off what is predicted to be a rush of lower mortgage offers after the Bank of England kept interest rates on hold last week.
The Spanish-owned, UK-based bank has cut its 5-year fixed rate to 4.95% for a loan-to-value ratio of 60%, with below 5.5% for a two-year fix.
It follows cuts by rivals Nationwide, Halifax, Skipton and Coventry last week.
Speaking to UK news agency, Newspage, Richard Campo, the founder of London-based Rose Capital Partners, said: “Santander are the latest to enter the hallowed ground of lenders who offer a mortgage that starts with a 4 and I feel they are far from being last.
“As money markets continue to fall, and lender competition hots up, I expect all major lenders to follow suit."
Campo added that the speed of the market change is presenting something of a dilemma for new borrowers.
"This is a very challenging dynamic for any borrower who wants a fixed rate at present as you are effectively playing Whack-A-Mole with your application.”