Families could save more than £1,000 on their mortgage bills as Britain’s biggest lenders go head-to-head in a summer mortgage price war – with deals tumbling below 4%.

Nationwide, Barclays and Skipton Building Society have all unveiled rate cuts this week, as competition heats up across the high street.

Nationwide sparked the latest round of reductions with cuts of up to 0.20 percentage points, offering fixed deals from 3.84% for switchers, additional borrowing and first-time buyers.

But rivals have quickly followed suit, with Barclays and Skipton BS launching their own rate drops. Barclays is now offering a two-year fix at 4.04% with no fee, or 3.91% with a £1,999 fee – both undercutting many recent high street deals.

For a homeowner taking out a £250,000 repayment mortgage, a rate cut from 4.29% to 3.91% equates to a reduction in monthly payments of around £45 – saving over £1,000 during a two-year fixed term.

Key deals now available:

• Nationwide: Switcher and additional borrowing rates down by up to 20bps, from 3.84%
• First-time buyers: 5-year fix at 90% LTV with no fee now 4.49%, down by 10bps
• Barclays: Two-year fixed at 3.91% with fee, 4.04% no-fee
• Skipton BS: Sub-4% fixed deals across a range of LTVs

Carlo Pileggi, senior mortgage manager at Nationwide, said: “We’re making further cuts across selected products from our fixed mortgage range to ensure that Nationwide continues to be front of mind for those looking to buy their first home, move to their next or who want to switch to a new deal.”

Michelle Lawson, director at Lawson Financial, called the latest Barclays offers “some summer sizzler rate cuts”.

She told Newspage: “The fact that Skipton’s rates have also been lowered is a sign of improving market confidence and the growing expectation of rate cuts this year, potentially next month.”

Stephen Perkins, managing director at Yellow Brick Mortgages, said: “Competition is heating up and those lenders on the grid are adapting their strategies. These latest rate reductions are welcome news to borrowers and the property market.”

Ken James of Contractor Mortgage Services said: “There’s a rate cut rumble right now… It’s not just about rates anymore. The mortgage market’s getting creative and competitive.”

Adam Stiles, of Helix Financial Partners, urged borrowers to move quickly. “Secure a rate as early as possible and make sure you – or your broker – keep an eye on rates with that lender so you can follow future rate drops down up until completion,” he said.

Pete Mugleston, at onlinemortgageadvisor.co.uk, said the market was clearly responding to falling funding costs.

“With a heatwave predicted for the weekend, the mortgage market is now starting to heat up again. Barclays and Skipton reducing rates is great news for borrowers and reflects the drop in swap rates we’ve seen recently,” he said.

Dariusz Karpowicz, director at Albion Financial Advice, added: “More mortgages are tumbling below the 4% barrier, giving borrowers genuine cause for optimism.”

Industry watchers say the cuts are being driven by falling swap rates – the key benchmark used to price fixed mortgages – and expectations that the Bank of England may lower its base rate as early as August.

If so, the current wave of reductions may be just the start of a high-street mortgage rate race that leaves borrowers the biggest winners.