In a week that saw more than 20 lenders reduce their fixed mortgage rates, Moneyfacts has warned that while swap rates have been falling, funding costs remain extremely sensitive to geopolitical tensions.

Rachel Springall, finance expert at Moneyfacts, said: “Lenders have continued to make healthy reductions to fixed mortgage rates over recent weeks as lower swap rates have fed through into mortgage pricing.

“The average two-year fixed mortgage rate is once again below the average five-year fixed rate at the time of writing, reversing the unusual pattern seen over the past three months.

“Another week of widespread rate reductions will no doubt be welcomed, especially on deals available to those with small deposits.

“While improvements in global market sentiment over the past few weeks have triggered falling swap rates, funding costs remain extremely sensitive to geopolitical tensions.

“Any renewed market volatility could quickly feed through into swap rates and slow the pace of further mortgage rate reductions over the coming weeks.”

Moneyfacts highlighted that among the biggest lenders, Barclays made selected fixed rate cuts of up to 66bps, with Halifax and Lloyds Bank cutting by up to 15bps, while Nationwide Building Society reduced fixed rates by up to 19bps.

Yorkshire Building Society also reduced selected fixed rates by up to 20bps.

Building societies were also highly active throughout the week, according to Moneyfacts.

West Brom Building Society reduced selected fixed rates by up to 18bps, while Leeds Building Society cut fixed rates by up to 21bps and launched new five-year products at 80% and 85% LTV.

While Scottish Building Society cut fixed rates by up to 35bps and introduced a new Professional range, while Principality Building Society reduced selected fixed rates by up to 17bps.

Springall added: “It is encouraging to see a fair few rate cuts on deals with competitive true-cost packages, with Yorkshire Building Society securing a place in the Moneyfacts Best Buys with its two-year deal at 75% LTV, cut to 4.37%, while Nationwide also earned a spot with its 85% LTV five-year deal priced at 4.57%.

“A key area of competition this week was the enhancement of higher loan-to-value deals (80% LTV or above) with lenders also launching new products into the fray.

“Atom Bank launched new Prime products up to 95% LTV, while United Trust Bank introduced new Super Prime and Prime Plus products at 90% and 95% LTV alongside cuts of up to 100bps across selected fixed and tracker rates.

“Metro Bank also expanded its offering with a new 100% LTV Joint Borrower Sole Proprietor (JBSP) mortgage, providing additional support for borrowers with smaller deposits.”