The competition brought by new lenders could result in marked reductions for home loan repayments. Mortgage repayments for borrowers in the UK could fall by as much as £600 a year.

The Daily Telegraph reports that such steep reductions may come as a result of new lenders bringing increasing levels of competition to the marketplace.

Numerous companies, such as Home & Savings Bank and NBNK, are expected to enter the market over the coming months - and this could lead to mortgage rates dipping below 1.5% for the first time.

Ian Gordon, a banking analyst at Investec, explained new entrants are likely to be attracted to the UK market by easier capital requirements and cheap funding.

Mr Gordon stated: "These dynamics should drive some element of price-led competition. There are plenty of reasons to believe that some downward pressure on mortgage pricing can be maintained."

It is anticipated that new lenders will be in a better position to pass on lower rates to borrowers than already established providers are currently able to.