Lenders last week cut mortgage rates, but brokers said it was too early to call the end of the credit crunch.

Nationwide, Britain’s second-largest mortgage provider, dropped rates on all its mainstream fixed-rate mortgages and some of its tracker deals for new customers by up to 0.46 percentage points.

Newcastle building society also lowered its two-year fix for borrowers with a 25% deposit from 6.20% to 6.12%. The moves follow six months of gloom in the mortgage market in which rates have seemed to go up weekly.

However, brokers pointed out that Nationwide also increased rates on some tracker deals for borrowers requiring more than 95% of the value of their property. For example, its two-year tracker with a £599 fee went up from 1.58% to 1.68% over Bank rate.

Halifax also announced cuts of up to 0.15 percentage points to its fixed deals. Its five-year fix for customers with a 25% deposit, for example, has gone from 6.49% to 6.34%.

BM Solutions, Bank of Scotland and Intelligent Finance, which are part of the same group as Halifax, have also made cuts.

Richard Morea of the broker London & Country said: “Though the most recent cuts are very good news for some borrowers, it does not mean we’re at the end of the crisis. Buyers with smaller deposits are also being penalised.”

Nationwide’s biggest cuts were to fixed rates, which are determined by swap rates in the wholesale markets. These have been falling in recent weeks as interest-rate expectations have slipped back. Two-year swap rates have fallen from a high of 6.48% in June to 5.79% last week, a 0.69-point difference.

Ray Boulger of broker John Charcol said swap rates were likely to decrease further with expectations that Bank rate would be cut before the end of the year.

He said: “This is not the time to fix. The general trend is that swaps are falling so there may be more cuts in the next few months. Those that haven’t reduced their fixed rates yet also have some catching up to do.”

Libor — the rate on which variable and tracker rates are based — has not come down as much although it has stabilised. Three-month Libor reached a high of 6.01% in March, but was last week down to 5.81%. This means lenders are unlikely to offer big cuts to variable-rate deals any time soon.

Another obstacle preventing an end to the mortgage crisis is that restrictions on deals remain high. The best deals are still offered to customers with a deposit of at least 25%.

Melanie Bien at Savills Private Finance said: “While rates are easing, criteria aren’t. Those with sizeable equity in their homes or a big deposit will still get access to the cheapest rates. This situation is unlikely to change for some time.”

However, she was upbeat about the overall picture saying: “The mortgage market may not be back to normal by any means, but it has stabilised dramatically in the past month.

“Instead of several lenders repricing upwards on a daily basis, this is happening much less frequently.

“Having said that, Nationwide has repriced downwards twice in just over a week suggesting that lenders are constantly reviewing the situation and are increasingly prepared to adjust their rates accordingly.”

Nationwide’s cut is the second it has made to fixed rates since the start of the month. Its standard two-year fixed deal — for borrowers with a 25% deposit — has fallen from 6.48% to 6.18%. At the start of this month the rate was 6.55%.

The drop means that a borrower’s mortgage repayment is now £50 a month less than at the start of July, if he or she were on a a typical £200,000 interest-only mortgage over 25 years — a saving of £1,200 over the two-year fixed period.

Nationwide’s cut follows similar moves by other leading mortgage lenders the previous week, including Halifax, Cheltenham & Gloucester and Abbey.

Smaller providers have also cut some fixed rates. Newcastle has lowered its two-year fix with a £1,098 fee from 6.20% to 6.12%. It has also launched a new two-year fix at a rate of 5.95% with a £1,598 fee.

All the deals are available to borrowers with at least a 25% deposit.