Platform has entered the mortgage price war with a new rate of 0.79 per cent.

The two-year fixed rate remortgage and purchase product is available up to 60 per cent of the property’s value and has a fee of £1,499 with £250 cashback. It is currently the lowest rate on the market.

The rates on its three and five-year fixed products at 60 per cent loan-to-value with £999 and £1,499 fees were raised by 0.02 per cent.

Platform has also made rate reductions of up to 0.32 per cent across the rest of its range.

This includes its 90 per cent loan-to-value deal which now has a rate of 1.97 per cent. This deal has a £999 fee and a £250 cashback incentive.

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The five-year fixed equivalent has a rate of 2.61 per cent.

At 85 per cent LTV, the two-year fixed rate with a £999 fee and £250 cashback is priced at 1.97 per cent.

Chris Sykes, associate director and mortgage consultant, Private Finance said Platform’s move to cut rates so low was “surprising” given the recent surge in inflation to 3.2 per cent.

Food and transport cost rises were behind August’s jump in inflation which rose by 1.2 percentage points month on month, the steepest rise since 1997 leaving inflation at its highest point since March 2012.

“We have been surprised at the speed of decline of the rates on offer at present and this is a significant fall from the previous best rate available of 0.84 per cent,” said Sykes. “This is surprising giving the recent inflation data to emerge and comment that the Bank of England may have to raise rates to curb inflation if it continues to grow.

“Lenders, however, are currently in a rate war to get the headline grabbing rates and while they are of course not available to the majority of borrowers, only those with low LTVs, good loan-to-income ratios and unblemished credit records, this is a significant rate cut.

“Banks and lenders have a lot of cheap money at present and as the market slows are actively competing to lend it. We suspect we could even see rates drop further in the coming weeks and a lender coming in at 0.75 per cent is highly likely soon.”