Nationwide has announced reductions across its range of fixed-rate mortgages at varying loan-to-value levels.
At 60 per cent LTV two-year fixes have been discounted by 0.15 percentage points to 1.59 per cent with a £999 product fee.
The product fee-free option has also been cut to 1.99 per cent.
A 0.05 percentage point reduction is applicable to five-year fixes at the same LTV level, now available at 2.29 per cent and 2.49 per cent for the product fee-free option.
First-time buyers pay a reduced product fee of £499. Remortgage borrowers receive a free standard valuation and the choice of either free standard legal fees or £250 cashback. A rate discount of 0.10 of a percentage point for existing borrowers is applied to all new loan deals.
What is more, the building society has made cuts to its Loyalty Rate Mortgages range which it claims compares mortgage rates for existing customers with those of its top six high street competitors, and guarantees to offer the lowest rate for those looking for a new deal.
Two-year fixes at 75 per cent with a £999 product fee have been reduced by 0.05 per cent to 1.74 per cent. The fee-free option is now available at 2.14 per cent.
For borrowers with a 15 per cent and 10 per cent deposit, fee-free five-year fixes have been cut by 0.20 of a percentage point to 3.44 per cent and 3.94 per cent respectively.
Provider view
Nationwide head of mortgages Henry Jordan said: “Nationwide continues to offer great value rates to customers, helping them to ensure longer-term security for mortgage payments. We are also demonstrating our mutual difference by offering competitive fixed-rate deals to new Nationwide mortgage customers, while continuing to offer additional discounts for existing mortgage customers and first-time buyers.”
Adviser view
Fife-based independent financial adviser Wendy Cochran said: “The deals are reasonably competitive.
“We are finding that since rates are so low it is only people with very large mortgages that can justify paying a large fee. When fixed rates were, say, around 4 per cent, the range of rates was perhaps from 3.5 per cent to 4.5 per cent – a difference of 1 per cent – so the cheaper rate was a lot more attractive and a fee was justified.
“Now rates are in general much lower, so for a two-year fixed deal they may only range from, say, 1.75 per cent to 1.99 per cent, so it is harder to justify a fee.
“We find clients are drawn to the fee-free, no valuation fee, free legals, and will pay 0.2 of a percentage point more in a rate to get a fee-free deal.”
Charges
Charges range from £0-£999.
Verdict
The mortgage market remains competitive with an increasing number of lenders unveiling cuts to their products. In addition, many lenders have taken to offering products with a fee-free option, albeit at a elevated rate of interest, which will be welcomed by those who are not able to foot an upfront charge.
The two- and five-year fixes at 60 per cent LTV come with a £499 product fee. While at face value this sounds good, there will be few first-time buyers holding a 40 per cent deposit.
