A trend of increasingly competitive rates even between lenders in the large loans market in recent weeks has been noted by Knight Frank Finance, mortgage advisors for prime properties.

Simon Gammon at Knight Frank says that despite bank base rates remaining on hold once again, the competition in the mainstream mortgage market is heating up.

He says: Some small lenders are making smash and grab offers, dipping into the market with low-rate deals which are withdrawn after a very short period of time and are designed to grab the best applicants. But these fleeting deals often have little influence on the large loan market as the borrowing limit is set at £1 million or £500,000.

"However, more recently we have been able to say there is good news for those borrowing larger sums as competition has also heated up between private banks, especially amongst international private banks. This competition is being boosted by the activity in the prime London property market, making the UK an attractive place for these banks to do business with high net worth individuals.

“A mortgage is a good way to start a business relationship with clients, and many banks are willing to offer deals as a loss-leader for the right borrowers who present their application in the right way," said Gammon.

For those looking to borrow a substantial amount, Knight Frank Finance are confident that rates can sometimes be even lower than the headline grabbing high street offers and Gammon says that "some private banks are offering variable rate deals priced as low as between a 1.5% and 2% pay-rate, beating anything on offer in the mainstream market."