Nationwide Building Society has cut rates by up to 0.7 of a percentage point across fixed and tracker deals, revised rates will also apply to those with smaller deposits.
Despite uncertainty around a possible rise in the Bank of England base rate this autumn the mortgage lender said it wanted to increase support for home movers as well as remortgage customers.
The rate revisions include a two-year fixed rate mortgage from 1.94 per cent, a three-year fixed rate from 2.39 per cent and a five-year fixed rate from 2.99 per cent.
Its two-year tracker rate has also been reduced and will start at 1.69 per cent.
Existing customers will also continue to benefit from an additional 0.1 per cent reduction whenever they make a new application to move home or switch products.
The lender’s current account customers can choose from either a four-year fixed rate Flexclusive mortgage at the same rate as the three-year version.
The two-year fixed rate is available at up to 60 per cent LTV, available for new customers at 1.94 per cent or 1.84 per cent for existing customers, and attracts a £900 fee.
A two-year fixed rate of up to 90 per cent LTV is available for new customers at 3.89 per cent or 3.79 per cent for existing customers, also with a £900 fee.
A five-year fixed rate up of to 60 per cent LTV is available for new customers at 2.99 per cent, or 2.89 per cent for existing customers.
All mortgages deals allow overpayments; these are allowed at a maximum of 10 per cent of the initial amount borrowed a year where an early redemption charge applies to the product.
Most also include a free standard valuation as well as free standard legal fees.
Lending above 85.01 per cent is available on fixed rate mortgages, while 95 per cent LTV mortgages are available to first-time buyers through Save to Buy and NewBuy.
A maximum of 75 per cent LTV is available for new build flats and 85 per cent LTV on new build houses.
REACTIONS
PROVIDER VIEW
Tracie Pearce, head of mortgages at Nationwide, said: “With increased debate around the possibility of an interest rate rise, customers are keen to access competitively-priced fixed rates and trackers.
“In particular, access to a rate of less than 2 per cent for a two-year fixed-rate mortgage and less than 3 per cent for a five-year version show that we continue to offer some of the most competitive rates on the market.
“Along with our outstanding customer service record, this makes Nationwide the first port of call for the needs of both new and existing customers, even those with smaller deposits.”
ADVISER VIEW
Dominic Basilea, director of Hertfordshire-based Aqua Wealth Management, said: “Nationwide has reduced its rates to remain a competitive lender. Once one of the big lenders starts to do this, others should follow.
“At a guess you could say they have been having a lull and one way of reducing rates is to bring clients back, this is probably the case with other lenders too. Already several others have reduced their rates.
“Mortgage lenders do borrow large amounts of cash at the same rate and it may also be with rates likely to go up they are making the most of the low interest-rate environment to attract borrowers while they can.”
CHARGES
A non-refundable booking fee of £99 is payable on reservation, a £900 fee is payable on completion.
VERDICT:
Nationwide’s decision to reduce rates is a shrewd one, bearing in mind many borrowers on SVR mortgages will be looking ahead to a predicted base rate rise. It is a move that is likely to be followed by other lenders and may offer hope to many cash-strapped home owners.
