Mortgage borrowers were given some good news earlier this week as falls in the interbank lending rate triggered a surge of rate cuts.
However those with the largest deposits remain in the best position as it is this group that are exposed to the most attractive deals.
On Wednesday HSBC revealed details of its cheapest mortgage ever offered by the lender, a two-year discount deal starting with a rate of 1.99%, while Cheltenham & Gloucester and Woolwich cut rates on their fixed-rate mortgages.
The price cuts were sparked by sharp falls made to banks' wholesale funding costs, and follow recent reports from lenders that both the mortgage and housing markets are showing definite signs of recovery.
The interbank lending rate determines the rate at which banks and brokers buy and sell money to each other.
However, margins continue to ride higher than before the credit crunch first emerged and lenders are still saving the most competitive rates for borrowers that have access to substantial deposits.
HSBC has launched a new loan with a discount deal offering a rate 1.95% below the bank's standard variable rate. However, this borrowers can only qualify for this deal if they can put up at least 40% on the value of the property. Those with 25% deposits can get a rate of 2.49%, while a 10% deposit will provide a significantly higher rate of 3.89%.
Martijn van der Heijden, head of mortgages at HSBC said the new mortgage was more attractive to those looking to remortgage, but the bank is now looking to help first-time buyers.
"We have also made our higher loan to value mortgages even better value to support the increasing number of home purchasers who either move, or step on the housing ladder for the first time," he said.
Fixed-rate mortgage deals have also begun to fall, as the rates upon which they are based, have also fallen. Woolwich cut the price of its two-year fixed-rate mortgage by 0.2% to 4.09%, with a fee of £999. It also launched another lower fee loan offering a rate of 4.19% with a £499 fee.
Cheltenham & Gloucester also made similar cuts to its mortgages, lowering the cost of its two and three-year fixed-rate mortgages by 0.1% - 0.2%.
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