The cheapest mortgage rate has dropped to its lowest since September, as price war intensifies between banks and building societies.

Platform, which is part of the Co-Operative Bank, will launch a five-year fixed-rate mortgage at 3.75pc on Monday.

The deal is targeted at wealthier borrowers, with a minimum loan size of £400,000 and a set-up fee of £1,999. It is the cheapest rate offered to borrowers since the final week of September, according to analysis by brokers L&C Mortgages.

Platform is also launching a five-year fixed deal at 3.89pc with a smaller fee of £999.

It will be the seventh lender to have reduced interest rates on five-year fixed mortgages below 4pc in the past two weeks. HSBC led the charge last week by launching a five-year fix at 3.99pc and Yorkshire Building Society followed by revealing a five-year deal priced at 3.98pc the next day.

Mortgage rates soared to more than 6pc last year, in the wake of market disruption caused by Liz Truss’ minibudget.

David Hollingworth, of L&C, said: “Repeated repricing is driving rates down gradually and more lenders are joining the sub-4pc club.

“Borrowers are pouncing on improved rates, and they have more choice. Hopefully there will be some more improvements to come.”

The average five-year fix has fallen from a high of 6.51pc in October to 5.05pc today, while the typical two-year rate has dropped from 6.65pc to 5.34pc in the same period, according to analyst Moneyfacts.

There are 18 mortgage deals currently available to borrowers looking to fix for five or ten years priced below 4pc.

First Direct, Halifax, HSBC, Lloyds, Nationwide, Virgin Money and Yorkshire Building Society all offer sub-4pc rates on five or ten-year deals, according to Moneyfacts. Lloyds has offered a rate of 3.99pc on a ten-year fix since December 2022, although longer deals are less popular with borrowers.

Mark Harris of SPF Private Clients, a mortgage broker, said: “The supply of mortgages is currently outstripping demand and that drives down margins, as lenders price deals to compete for business.

“But I would not spend too much time waiting for cheaper rates, as there is no guarantee they will arrive – certainly not immediately,” he added.

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