Barclays, Halifax and Nationwide cut mortgage rates with sub-5% deals as the Bank of England prepares to hike

Virgin Money is also preparing rate cuts of up to 0.17 per cent, adding to a wave of reductions driven partly by lenders competing in a sluggish housing market.

A data graphic showing mortgage rates from major lenders, as broker Stephen Perkins cautioned borrowers against expecting mortgage rates to move in lockstep with the base rate in either direction.

Barclays cut mortgage rates by up to 0.3 percentage points, pushing its cheapest deal down to 4.89 per cent, while Halifax dropped rates by 0.22 points and Nationwide by as much as 0.15 points from Wednesday. The cuts come despite the Bank of England being widely expected to raise the base rate from 3.75 per cent to 4 per cent on Thursday, with average two-year and five-year fixed rates still sitting close to 6 per cent.

Sub-5% deals are available only to buyers with a deposit or equity of at least 40 per cent — those borrowing at 75% LTV or higher continue to face rates above 5%.

Five-year fixed rates fell through the 6 per cent threshold for the first time this month, having been pushed up by a spike tied to renewed escalation of the Iran conflict stoking inflation fears.

Broker Stephen Perkins warned borrowers 'should not assume mortgage rates automatically follow the base rate in either direction'.

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