The average rate for a two-year fixed mortgage dropped slightly to 4.55% from 4.65% last week, according to data from Uswitch

Three major lenders have cut their mortgage deals while a fourth has launched a cashback offer to attract first-time buyers as the market sees a winter mortgage price war looming.

The average rate for a two-year fixed mortgage dropped slightly to 4.55% from 4.65% last week, according to data from Uswitch. The average five-year fixed deal edged lower to 4.84% from 5.03%. Those are the average rates on a 75% loan-to-value (LTV) mortgage, meaning buyers need to have at least 25% for a deposit.

Barclays, NatWest and Nationwide have trimmed pricing on some of their cheapest mortgage deals.

NatWest’s cheapest five-year fixed deal comes in at 3.83%, which is lower than last week’s 3.84%.

Barclays has cut its two-year fix to 3.63% from 3.73%, with a £899 product fee.

For Nationwide’s five-year deal, the rate has dropped to 4.08% from 4.13% deal.

UK inflation fell for the first time five months, sliding to 3.6% on annual basis, raising hopes that the Bank of England (BoE) will lower interest rates in December from 4%. The central bank’s base rate influences those set by lenders so another rate cut would be welcome news for mortgage borrowers.

Meanwhile, a reduction in the Cash ISA limit has raised concerns in the mortgage industry. Some experts fear that this change could dampen the amount of money building societies have available to lend to homebuyers, potentially tightening the availability of credit.

HSBC has unveiled a new offer granting first-time buyers up to £2,000 in cashback, a move brokers say could ignite a winter mortgage price war as lenders jostle for market share.

The incentive accompanies a new round of rate cuts across the bank’s residential and buy-to-let ranges. The cuts follow a recent easing in swap rates, the benchmark used to price fixed-rate mortgages, which has strengthened market expectations that the Bank of England could reduce interest rates at its next meeting on 18 December.

Katy Eatenton, mortgage and protection specialist at St Albans-based Lifetime Wealth Management, said the lender’s strategy could provide timely support to new buyers.

Cash is king and this move from HSBC will provide support to lots of first-time buyers, she said. The costs of buying a home are often overlooked, but they bite hard, and cashback incentives like this can be of real value to aspiring homeowners. This could stimulate the market, especially if other lenders follow suit.

Ben Perks, managing director at Stourbridge-based Orchard Financial Advisers, said the bank had “come out swinging” in the wake of the budget. HSBC, he argued, appeared intent on capturing as many first-time buyers as possible in a final push toward 2025.

There’s always a lot of talk about how hard it is to save for a deposit, he said. But on top of that, there are a few grand in fees to be paid.