Some said yesterday that the cuts were some way off and would come in small stages, while others believed there could be a sharp cut by the end of next week.
A sharp cut in base rates would enable lenders to bring mortgages to below 9 per cent compared with the current average of 10.65 per cent. Less than 24 hours earlier, societies had been contemplating having to raise mortgage rates by 4 percentage points or more.
Peter Green, head of treasury at Leeds Permanent Building Society, said the money markets were already looking for lower interest rates. 'If we stay out of the ERM there is scope for significant cuts. Rates could be as low as 8 per cent by the end of the year. If we rejoin, interest rates will still come down sooner or later and mortgage rates will follow.'
If interest rates were cut by just 0.5 per cent, then Leeds would consider cutting mortgage rates. 'Every little bit could help.'
But lenders might hang back if they believed that another cut was on the way. Richard Bolton, chief economist at Abbey National, the second-largest mortgage lender, said there could be a full 2 percentage point cut in interest rates by the end of next week which would bring mortgage rates down to below 9 per cent.
'The Government might try to get the economy moving. If we are going back into the ERM the economy has got to be in reasonable shape.'
David Gilchrist, general manager of the Halifax, Britain's largest lender, said he hoped that interest rates would come down by Christmas. 'This would be good for the housing market. We want to see how rates settle down after the (French) referendum, although we accept that it is less significant than it was.'
Adrian Coles, of the Council of Mortgage Lenders, said real interest rates were high - especially in housing where prices were still dropping by 5 per cent.
'A cut of 0.5 per cent would probably not be enough to trigger a cut in mortgage rates. We would not dismiss a 0.5 per cent cut, but we are looking for a string of small cuts.'
Nationwide Building Society allocated pounds 50m of fixed-rate mortgages to existing customers yesterday when the Government twice raised interest rates, taking minimum lending rate to 15 per cent before pulling out of the ERM.