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This compares with reductions on many tracker rates. For example, Alliance & Leicester and Halifax have reduced rates on thier products by up to 0.3 per cent.

Research by national brokers Mortgageforce shows that whereas 75 per cent of its borrowers had been taking fixed rates in recent weeks, this has fallen to only 64 per cent this week.

Katie Tucker, technical manager for Mortgageforce, said: "Next week will be as confusing for borrowers.

"Whilst a borrower's choice between a fixed rate and a tracker is largely based on how they expect bank rate to behave in the next few years, when the price difference between the two is this significant, it's difficult to resist the cheaper one."

For example, a borrower with 20 per cent deposit considering Nationwide's new rates can either opt for a two-year fix at 6.28 per cent, or a tracker at 5.23 per cent.

This difference equates to £114 interest to the monthly payment on a typical £130,000 mortgage.

Tucker explained: "The lenders have to keep their split between customers on fixed rates and tracker rates even, to mitigate the risk of their own wholesale costs rising; so they price their fixed and tracker deals to attract attention accordingly."