Hope for borrowers as lenders start a price war.

Louise Cuming, head of mortgages at moneysupermarket.com, said: "We are in the midst of a mortgage crisis, yet three quarters of the nation's biggest lenders have recently slashed rates on deals. For such a significant proportion of mortgage providers to drop their rates underlines an industry wide recognition that rates were too high.

"This is good for borrowers who can take heart in some positive news - a rarity during the current credit crisis. I am also pleased see lenders making a real effort to make borrowing more affordable.

"Sadly, as is so often the case though, the good news is restricted to customers with a spotless credit rating and a large deposit - most commonly around the 25 per cent mark.

"Lenders, of course, are cherry picking which customers they offer the lowest rates to, meaning the gap between the 'haves' and 'have nots' in the UK is set to widen further."