Generation H was the first lender to introduce a sub-4pc deal in that period, offering a 3.94pc five-year fixed rate for those with a 40pc deposit.
HSBC became the first major high-street lender to offer a mortgage deal with a rate below 4pc at the start of this year, giving hope to millions of homeowners renegotiating loans.
They face remortgaging at a time when central interest rates stand at 5.25pc. This is up from the record low of 0.1pc during the pandemic.
Analysts are forecasting further rate cuts over the next two years.
In the last few days, however, swap rates – the main pricing mechanism for fixed-rate mortgages – are tracking up again raising questions about how long sub-4pc deals can remain on the market in the short term.
Mr Mendes said he is keeping an eye on how long the Co-op deal stays on the market if swap rates continue to rise and cut into lender margins
Chris Sykes, technical director at mortgage broker private finance said that the rates being offered by Co-op were almost “too good if anything.” He added that he did not think such rates would be around for long.
Yet, if there is a pause in rates falling in response to swap rates the longer term direction of travel is still expected to see sub-4pc rates become the new normal, Mr Mendes added.
He said: “If we do see a pause it will likely be a small hiccup rather than anything else.”
Average mortgage rates have fallen considerably over the past six weeks, according to data company Moneyfacts.
At the start of December the average five-year fixed rate was 5.65pc. Today it stands at 5.37pc.The drop would save a borrower £408 a year on a £200,000 mortgage on a 25-year term.