Goldman Sachs predicting the Bank of England will cut interest rates next week
Barclays is the latest lender to announce it will cut mortgage rates across its fixed rate deals aimed at home buyers.
From tomorrow, the high street bank will offer the best deal on the market after cutting its lowest two-year fix to 3.73 per cent for those buying with at least a 40 per cent deposit.
On a £200,000 mortgage being repaid over 25 years, that would equate to paying £1,026 a month. It comes with a £899 product fee that can either be paid upfront or added to the loan.
For those that are Premier Banking customers with Barclays it's possible to get a 3.72 per cent rate.
Only Lloyds Bank has an exclusive deal for its banking customers that's cheaper, at 3.67 per cent.
A host of big banks have lowered rates over the past week. Both HSBC and Barclays were first to do so last week, closely followed by NatWest, Halifax and Santander.
Better deals for borrowers: Barclays has cut rates for home buyers, including a new best buy
Barclays' announcement comes with Goldman Sachs predicting that the Bank of England will cut interest rates to 3.75 per cent next week.
Previously, most were expecting the rate to remain at 4 per cent until February next year.
Analysts at the investment banking giant argue that fading pressures and sluggish growth will open the door to a move sooner than most other analysts and traders expect.
If correct, this could pave the way for further mortgage rates cuts over the coming weeks.
Aaron Strutt of mortgage broker Trinity Financial, said: 'It only takes one or two of the big lenders to lower their prices for other large and smaller mortgage providers to follow.'
'If the base rate comes down next week or in December we may well have noticeably better rates to start the year with.'
A further sign that further mortgage rate cuts could be on the way are Sonia swap rates.
The price of fixed mortgages is heavily influenced by Sonia swap rates - the inter-bank lending rates which are based on expectations of where rates will be in the future.
As of today, two-year Sonia swaps are at 3.5 per cent and five-year sonia swaps are at 3.58 per cent.
Only a month ago, two-year swaps were at 3.72 per cent and five-year swaps are at 3.8 per cent.
Cuts coming: Goldman Sachs has predicted that the Bank of England will cut interest rates next week - providing relief for millions of borrowers
Will the base rate fall next week?
While Goldman Sachs is predicting a base rate cut next week, the overall market is slightly less convinced.
Financial markets have gone from pricing in less than a 25 per cent chance of another rate cut by the end of the year to a two-thirds chance now - but that means a cut could come in December.
This is due to a lower inflation peak and rumours of a less inflationary budget.
'We doubt this will be enough to tempt the Monetary Policy Committee into a rate cut next week,' says Thomas Pugh, chief economist at leading audit, tax and consulting firm RSM UK.
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'We expect a 3-6 vote for a hold. But it throws the door wide open to a rate cut in December, especially if the budget is deflationary.'
Pugh is expecting the Bank of England to take a more cautious approach to rate cutting than Goldman Sachs' analysts.
'The MPC will want to see what is actually in the budget before committing to further rate cuts,' he says.
'Our hunch is that the next rate cut still won't come until February, as the committee will want to let inflation come down a little further.
'But the door to a December rate cut is now potentially wide open, especially if the budget focuses on deflationary tax rises - like income tax increases - and shies away from things that would boost inflation such as employers NICs, VAT, duties etc.
Pugh adds: 'All this is undoubtedly good news for Rachel Reeves, as it will lower the government's borrowing costs. It will also go some way to lowering cooperate borrowing costs and mortgage rates.'
How to find a new mortgage
Borrowers who need a mortgage because their current fixed rate deal is ending, or they are buying a home, should explore their options as soon as possible.
Buy-to-let landlords should also act as soon as they can.
Quick mortgage finder links with This is Money's partner L&C
> Compare mortgage rates
> Find the right mortgage for you
What if I need to remortgage?
Borrowers should compare rates, speak to a mortgage broker and be prepared to act.
Homeowners can lock in to a new deal six to nine months in advance, often with no obligation to take it.
Most mortgage deals allow fees to be added to the loan and only be charged when it is taken out. This means borrowers can secure a rate without paying expensive arrangement fees.
Keep in mind that by doing this and not clearing the fee on completion, interest will be paid on the fee amount over the entire term of the loan, so this may not be the best option for everyone.
What if I am buying a home?
Those with home purchases agreed should also aim to secure rates as soon as possible, so they know exactly what their monthly payments will be.
Buyers should avoid overstretching and be aware that house prices may fall, as higher mortgage rates limit people's borrowing ability and buying power.
What about buy-to-let landlords?
Buy-to-let landlords with interest-only mortgages will see a greater jump in monthly costs than homeowners on residential mortgages.
This makes remortgaging in plenty of time essential and our partner L&C can help with buy-to-let mortgages too.
How to compare mortgage costs
The best way to compare mortgage costs and find the right deal for you is to speak to a broker.
This is Money has a long-standing partnership with fee-free broker L&C, to provide you with fee-free expert mortgage advice.
Interested in seeing today's best mortgage rates? Use This is Money and L&Cs best mortgage rates calculator to show deals matching your home value, mortgage size, term and fixed rate needs.
If you're ready to find your next mortgage, why not use L&C's online Mortgage Finder. It will search 1,000's of deals from more than 90 different lenders to discover the best deal for you.
> Find your best mortgage deal with This is Money and L&C
Be aware that rates can change quickly, however, and so if you need a mortgage or want to compare rates, speak to L&C as soon as possible, so they can help you find the right mortgage for you.
Mortgage service provided by London & Country Mortgages (L&C), which is authorised and regulated by the Financial Conduct Authority (registered number: 143002). The FCA does not regulate most Buy to Let mortgages. Your home or property may be repossessed if you do not keep up repayments on your mortgage