The cost of fixed rate mortgages is set to plummet as lenders rush to meet 2015 lending targets.
London estate agent Portico.com has predicted that lenders will slash rates to new lows as a “race to the bottom” begins.
This latest mortgage rate war comes as mortgage approvals have increased to their highest level for years, as borrowers anticipate interest rate rises in 2016.
Last month a string of lenders launched new deals as the threat of an imminent base rate hike receded. Now a new price war could drive rates to even lower levels.
Robert Nichols, managing director at Portico, said the majority of lenders are behind in their 2015 lending targets.
He predicted that the cost of fixed rates for residential mortgages will plummet in the final months of this year, as lenders desperately try to catch up.
“There is no doubt we are seeing some very attractive fixed rate mortgages as the lenders seek to meet their lending targets.
“This is good news for homebuyers this autumn.
“We are also predicting that record low mortgage rates will continue well into next year, as lenders continue to compete for business.”
Although several Bank of England policymakers have hinted at an early base rate hike, the global economic slowdown is pushing expectations well into 2016.