Research carried out for Telegraph Money by mortgage broker Coreco found that for buyers with 40pc deposits, 74pc of the best fixed-rate mortgages were offered by banks.  Twenty-four of the 30 cheapest two-year fixed rates on the market for those with a 40pc deposit were offered by banks, and just six by building societies.  This pattern was repeated across three-year and five-year fixed rates. However, the split was a little more even for 10-year fixed-rates, with 17 of the top 30 offered by banks.  For buyers with 10pc deposits, the split is half-and-half: 15 of the 30 cheapest two and three-year and 14 of the cheapest five-year fixed rates were offered by banks. Ten-year fixed rates for small-deposit buyers were offered only by Nationwide and TSB, with the building society offering a much broader range of rates.  This reflects the fact that building societies tend to cater more for "fringe" borrowers - those with smaller deposits or more unusual financial situations, or who are over 65, while banks compete on price for more mainstream borrowers.  Nationwide, Leeds, Coventry and Skipton building societies were the lenders most often at the top of best-buy tables.  Nationwide offers the most competitive deals because it is a "building society that behaves like a bank", brokers say, and has other sources of income such as financial planning.  The mutual has already cut rates on a series of fixed rate mortgages, citing the Bank Rate cut as the reason.  Edward Checkley, of Private Finance mortgage brokers, said: "The gap between banks and building societies does significantly widen as a consequence of base rate reduction.  "Plenty of building societies will only lend their savings deposit monies. They lend based on their own standard variable rates and can’t compete with the general market when it comes to base rate trackers."
Building societies will struggle to compete with banks on mortgage pricing following last week's Bank Rate cut, experts have said.