Nationwide is the first lender to finally breach the 4% benchmark following recent weeks of downward repricing. This is welcome news for borrowers and signifies a significant change in the mortgage landscape after recent months of increased rates.
Effective from today, Nationwide has reduced rates by up to 0.25% across its two-, three- and five-year fixed rate products, with its lowest rate now standing at 3.99%. This rate is for purchases only. Those remortgaging will need to wait a bit longer before we see rates below 4% as well.
These changes will also see Nationwide as the first major high street lender to return to offering a five-year fixed rate mortgage with a rate below 4%.
The new rates include:
New customers moving home: reductions of up to 0.23% across two, three, five-year fixed rate products up to 95% LTV, including:
+ Five-year fixed rate at 60% LTV with a £1,4992 fee is 3.99% (reduced by 0.19%)
+ Five-year fixed rate at 60% LTV with a £999 fee is 4.04% (reduced by 0.19%)
+ Five-year fixed rate at 60% LTV with no fee is 4.24% (reduced by 0.23%)
+ Five-year fixed rate at 85% LTV with a £999 fee is 4.50% (reduced by 0.10%)
+ Two-year fixed rate at 80% LTV with a £999 fee is 4.87% (reduced by 0.11%)
First-time buyers: reductions of up to 0.24% across two, three, five-year fixed rate products up to 95% LTV, including:
+ Five-year fixed rate at 85% LTV with a £999 fee is 4.55% (reduced by 0.24%)
+ Two-year fixed rate at 85% LTV with a £999 fee is 4.95% (reduced by 0.19%)
+ Five-year fixed rate at 60% LTV with a £1,499 fee is 4.34% (reduced by 0.20%)
+ Five-year fixed rate at 60% LTV with a £999 fee is 4.39% (reduced by 0.20%)
Remortgage: reductions of up to 0.17% across two, three, five-year fixed rate products up to 90% LTV, including:
+ Five-year fixed rate at 60% LTV with a £1,499 fee is now 4.27% (reduced by 0.08%)
+ Five-year fixed rate at 75% LTV with a £999 fee is now 4.43% (reduced by 0.17%)
+ Two-year fixed rate at 75% LTV with a £999 fee is now 4.79% (reduced by 0.10%)
Nationwide is also reducing selected two-, three- and five-year switcher rates up to 95% LTV by up to 0.25% with rates starting from 4.24%. These latest changes also continue Nationwide’s existing mortgage customer pricing pledge, meaning that all switcher product rates will be the same or lower than the remortgage equivalents.
In addition, Nationwide is reducing rates for existing customers moving home by up to 0.23% on selected two, three and five-year fixed rate products up to 95% LTV, while additional borrowing rates are being cut by up to 0.25% on two, three and five-year fixed products up to 90% LTV. At the same time, Nationwide is increasing the rates by up to 0.15% on selected two-year tracker products.
Henry Jordan, Nationwide’s Director of Home, said: “These latest rate cuts and the reintroduction of a sub-4% product further reinforce our position as one of the most competitive lenders in the market. We’ve made rate reductions across our fixed rate mortgage range because, as the country’s largest mutual, we want to maintain our support for all types of borrowers through attractively priced products, whether it be home movers, first-time buyers or those looking to remortgage or switch their deal.”
We will likely see other lenders look to reprice again in the coming days, pushing rates down further.
A spokesperson for John Charcol said: “We will likely see the likes of HSBC look to reprice again to ensure they remain ahead of the pack, potentially resulting in another quick reprice from them.
“Lenders have been busy competitively repricing against each other over the last fortnight, with purchase rates significantly lower than remortgage rates.
“Purchase rates are highly competitive compared to market pricing. Expect the biggest future reductions to be in remortgage rates, as they still have room to decrease, and any significant reductions are expected in this area.”
Simon Gammon, managing partner at Knight Frank Finance, added: “The arrival of sub 4% mortgages will have a sizeable impact on sentiment, provided other lenders follow. Borrowers generally feel much more comfortable when rates begin with a three, so conditions are primed for a busy autumn.
“That said, it is surprising that lenders are still cutting rates when the latest set of inflation figures failed to show much progress on some of the key points of concern among Bank of England policymakers. It really is a demonstration of how competitive the market is. Margins are already wafer thin, but the lenders are eager to make up for lost ground after months of disappointing levels of activity.
“We can expect rates to fall quite quickly when we do get a meaningful change in the inflation narrative.”
