In an effort to put up defenses against a falling amount of overall mortgage lending, two of the largest lenders are going head to head in a bidding war. Lowering the already low interest rates on their most popular mortgage plans is currently underway. Those looking to buy property for the first time, move house, or remortgage are now in an enviable position.

Mortgage lending has fallen over the past few months overall and many lenders are doing everything in their power to get more buyers through the door. That includes dropping interest rates even lower than they were before. Competition has been keen all year, but many are taking it up a notch in an effort to not only gain more business now, but also buffer against what could take place after the referendum which is quickly approaching.

Many lenders have dropped interest rates to below 3% on terms lasting 10 years. Those searching for homes can even find rates well below 3% if they have enough down payment.

Those seeking a remortgage should especially sit up and take notice. The purpose of a remortgage is to not only secure a lower interest rate compared to the current rate on the deal, but to also access valuable home equity which can take on multiple uses. Home owners obtaining remortgages use home equity through the process to pay off old debt, start a much-needed home renovation, or to take a relaxing holiday.

Uncertainty about the impact of a possible exit from the upcoming vote has many guessing what will happen with interest rates in the coming weeks.

Andrew McPhillips, chief economist at Yorkshire Building Society, commented on the possible impact, saying: “It is likely that if the UK votes to leave the EU, the Bank will cut base rate in an attempt to stabilise the economy.

“That said, even if the base rate is cut, mortgage interest rates may increase. Lenders will need to ensure that they remain profitable as wholesale and retail funding becomes relatively more expensive. This is most easily achieved by increasing borrowing costs.”

McPhillips added: “Conversely, a vote to remain would most likely mean that interest rates would increase further down the line at a gradual pace depending on future growth in inflation.”