Property expert Sam Fox, founder of the UK Mortgage Centre, says a new wave of rate cuts is likely before the end of June, driven by falling funding costs, intensifying competition between lenders and the start of the busy summer moving season.

However, he is urging borrowers not to let optimism tip into complacency.

The best mortgage isn't always the cheapest headline rate.

It's the one that gets you where you want to be, at a cost you can comfortably afford. Mortgage products can disappear overnight. Lenders regularly withdraw deals without notice, and market conditions can change quickly.

Why rates are falling

The immediate catalyst is a sharp drop in swap rates, the benchmark that lenders use to price fixed-rate mortgages. Over the past month, two-year swap rates have fallen by almost 20 basis points, while five-year swaps have dropped by around 15 basis points. When funding costs ease, lenders have more room to reduce rates while protecting their margins.

Barclays and NatWest have already acted. Barclays launched a two-year fixed rate at 4.39 per cent, placing it among the most competitive deals currently available. NatWest, meanwhile, cut selected tracker remortgage rates by more than half a percentage point. Fox expects other lenders to follow quickly.

Mortgage lending is intensely competitive. When one or two major players make their move, everyone else pays attention. No lender wants to spend the summer watching business flow elsewhere because its rates are no longer competitive.

A market in motion

The timing is significant. Summer is traditionally one of the busiest periods for the housing market, as buyers aim to complete moves before autumn and homeowners review their finances. Lenders are well aware of this, and Fox believes the pressure to attract remortgage customers in particular will push more lenders to sharpen their pricing in the coming weeks.

He also points to encouraging signs for first-time buyers, who have faced some of the steepest affordability challenges of the past two years. Competition is now increasing among lenders for borrowers with five or ten per cent deposits, a segment where rates have remained stubbornly high. Even modest reductions in this bracket, Fox notes, can meaningfully improve affordability calculations and open doors for buyers who have been priced out.

His advice to borrowers

Despite his expectation of further cuts, I am clear that waiting is not a strategy in itself.

Just because rates may fall further doesn't mean holding out is always the right decision.

If you find a mortgage that suits your circumstances, meets affordability requirements and offers a competitive rate, don't assume a better deal will definitely arrive tomorrow.

My message is straightforward: the direction of travel is downward, conditions are more favourable than they have been in two years, and borrowers should take professional advice to find the right deal for their situation rather than chasing a headline figure that may never materialise.

Sam Fox is the founder of the UK Mortgage Centre. For more information visit ukmc.co.uk