Nationwide building society yesterday announced a number of sharp cuts to its mortgage rates, giving hope to borrowers that more competitive pricing may return to the market.

Many two-year fixed rates were reduced by 30 basis points, taking the best rates for borrowers with large deposits down to 6.18%. Some tracker rates also fell by a smaller margin of 10 basis points.

'This reflects falling swap rates, which dictate the future movement of fixed rates and have dropped to levels last seen in mid-May,' said Melanie Bien, at Savills Private Finance.

This is the second time Nationwide has reduced rates in just over a week, but the bank is still charging a premium for riskier business.

Financial Times, Daily Telegraph