Yesterday all the talk was of higher rates for borrowers, but today Abbey has announced that it is cutting its two-year fixed-rates in an effort to stay competitive.

Earlier this week a number of lenders said that rates on tracker mortgages were to rise as a result of the higher inter-bank lending rates, potentially spelling more trouble for those already grappling with a bad credit score.

But Abbey's latest move shows that some parts of the market are still moving in the right direction, not least highly-popular fixed-rate deals.

Prices for two year deals for both buyers and those wanting to remortgage will be cut by 0.15 per cent, with both now below six per cent, the lender said.

“We are committed to ensuring that Abbey’s fixed rate mortgages continue to be among the most competitive rates in the market," said Abbey's Nici Audhlam-Gardiner.

"Two-year fixed rate products are the most popular products in the Abbey range," Ms Audhlam-Gardiner added.

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