Two major banks have cut their their mortgage rates on news interest rates could now fall faster than expected.

Both HSBC and Barclays have today announced they will be lowering rates across some of their fixed-rate mortgage deals.

It follows hot on the heels of yesterday's inflation figures, which showed consumer prices rose by 3.8 per cent in the 12 months to September. This was below the 4 per cent that most analysts had predicted.

As a result, forecasts for a cut to the Bank of England's base rate have been revised, with some now predicting another reduction this year to 4 per cent. Previously the rate wasn't forecast to fall until 2026. 

This could be good news for mortgage borrowers, as mortgage rates tend to fall when the base rate does. 

The current average mortgage rate is around 5 per cent. 

Average rates had risen in recent weeks as lenders exercised caution ahead of possible tax rises in November's Budget.

Barclays will cut its rates by up to 0.1 per cent, and will now offer a 4.01 per cent five-year fix with an £899 product fee for those with a 40 per cent deposit. 

The price of fixed mortgages is heavily influenced by Sonia swap rates - the inter-bank lending rates which are based on expectations of where rates will be in the future.

As of today two-year swaps dipped below 3.5 per cent - meaning that banks think mortgage rates could fall to that level within two years. Five-year swaps are at 3.57 per cent. 

This time last month, two-year swaps were at 3.7 per cent and five-year swaps were at 3.75 per cent.

The lowest two-year fixed mortgage rate is currently 3.82 per cent - offered by Santander to people able to buy a home with at least a 40 per cent deposit.

The lowest five-year fix is a 3.98 per cent deal offered by First Direct, again for those able to buy with at least a 40 per cent deposit.

David Hollingworth, associate director at broker L&C Mortgages, said: 'There are early positive signs for mortgage rates after the rate of inflation for September held steady, undershooting expectations.

'There will be hope that inflation may have peaked at a lower level than expected, despite still being almost twice the Bank of England's 2 per cent target. 

'That has potentially opened the door to another reduction in the Bank of England base rate coming before the end of the year.'

Hollingworth added that other lenders could follow Barclays and HSBC. 

'Once there are moves from the big players it will almost inevitably see others follow suit,' he said. 

'If the more positive outlook in the markets holds firm we could see another series of repricing moves that will cut fixed rate pricing.'