Tessa Skot, of mortgage broker Better, said: “After a very weak December for lenders, the competition to attract customers is now fierce and that means there are good deals to be had.
“That competition, coupled with growing confidence that an end is in sight for interest rate rises, is good news for anyone seeking a mortgage or remortgage.
“Borrowers are in a much stronger position than they have been for some time, but only if they shop around.”
The price war has already knocked thousands of pounds off the cost of borrowing since mortgage rates peaked in November last year.
The average two-year fix has fallen from a high of 6.65pc to 5.43pc today – a saving of £153 in monthly interest, or £1,836 a year, for a typical borrower with a £150,000 loan.
Craig Fish, of broker Lodestone Mortgages and Protection, said lenders were rescuing fixed rates on a daily basis.
Mr Fish said: “When one lender announces a rate reduction, the others tend to follow. The rate war is well and truly on and it’s now a race to see who is going to be the first to offer five-year fixed rates below 4pc.”