The rate cuts come following the news inflation had remained at 3.8% in September

Barclays is reducing rates tomorrow (24 October) on a number of products including lower deposit mortgages.

A rate of 4.82% is now available on its five-year fixed rate 95% loan-to-value (LTV) deal for those with a 5% deposit. This one comes with no product fee.

Its lowest rate is now 3.86% for home buyers with a 40% deposit. This two-year fixed rate mortgage comes with an £899 fee.

Meanwhile, it emerged HSBC would reduce rates too. Although the details have not yet been revealed, the Newspage agency reported the lender was ‘extensively decreasing rates across their residential products at every loan-to-value (LTV)’.

The rate cuts come following the news inflation had remained at 3.8% in September. Experts think the fact inflation had not increased to the expected 4% may have had a positive impact on the markets.

Jack Tutton, director at Fareham-based SJ Mortgages, told Newspage the economic outlook for the UK was looking slightly better and that was filtering through to rates.

He added: Finally, some positive news for mortgage holders after what has been a lot of doom and gloom with mortgage rates on the increase.

Financial markets have improved significantly in the last couple of weeks, these improvements have allowed for both HSBC and Barclays to make these positive changes with the hope that the rest of the market follows, he said.

With the budget around the corner, it will be interesting to see how brave lenders are with any changes that they make to their products ahead of the Chancellor making her statement, he added.

Anyone looking to take out a mortgage is advised to do so before the Budget on 26 November, however.