Mortgage banks today gave homeowners more cause for hope as the UK's two biggest lenders decreased rates again on some of their deals.

HBOS, which includes Halifax, Intelligent Finance and Royal Bank of Scotland, is cutting rates for the tenth time this year by as much as 0.38 percentage points off one of its deals, in a further sign that the mortgage market is improving for some borrowers.

A two-year fixed rate from Halifax will come down from 6.57 to 6.19 per cent from Wednesday. On a £150,000 mortgage, this would reduce repayments by £35 a month, from £1,019 to £984.

Abbey, now the country's biggest lender, will cut some rates by up to 0.10 percentage points on Wednesday.

The moves follow similar price cuts by HBOS and other lenders including HSBC, RBS and Woolwich, the lending arm of Barclays, last week. Lenders have been able to reverse the trend of rising mortgage rates in the past month because of falls in the cost of wholesale funding. Halifax said today that it was "repricing to stay in line with its competitors".

However, experts said that although the recent cuts are a good sign, they are not yet enough to undo all of the rate rises that homeowners have endured since the credit crunch took hold one year ago and do not apply to all deals.

Nor are falling rates benefitting homeowners with less than 25 per cent equity in their homes.

For instance, for borrowers wanting a loan for 95 per cent of the property value, Halifax has cut rates by up to just 0.05 points. For a five-year fixed deal, a borrower with just 5 per cent equity would have to pay 7.64 per cent interest.

Melanie Bien, director of independent mortgage broker Savills Private Finance, says: "While the big lenders have cut rates several times in the past few weeks, there is still some way to go before they get back to where they were before the recent spate of rises. Criteria are not easing and the best deals remain available to those with significant equity in their home."

However, there are signs that banks' confidence in some areas of the property market is improving. For instance, Abbey will also extend the maximum loan size it is willing to offer to £5 million from a previous limit of £550,000, signalling restored faith in the super-size loan end of the market.

HBOS said it is also launching some deals with lower fees. The Government recently criticised lenders for increasing the costs of taking out a mortgage as well as the rates over recent months.

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