Nationwide BSMay 10 2017

Nationwide cuts rates on fixes and trackers

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Nationwide cuts rates on fixes and trackers

Nationwide Building Society has applied discounts on selected two and five-year fixes as well as tracker mortgage products by up to 0.2 of a percentage point.

Highlights include a two-year fix to 60 per cent loan to value now available at 1.19 per cent with a £999 fee and 1.59 per cent with no fee. For borrowers with a 10 per cent deposit, the reduced rates are 2.24 per cent with a £999 fee and 2.64 per cent with no fee.

The five-year fixed rate product to 60 per cent LTV now starts at 1.89 per cent with a £999 fee and 2.09 per cent with no fee.

Meanwhile, selected trackers have also been reduced, with the two-year loan to 60 per cent LTV starting at 1.19 per cent with a £999 fee and 1.59 per cent with no fee.

The five-year tracker with a £999 fee has been cut by 0.2 of a percentage point and now starts at 1.69 per cent for up to 60 per cent LTV products.

All Nationwide tracker mortgage products currently have no early redemption charges (ERCs). Existing mortgage customers benefit from a 0.1 percentage point discount on the new customer rate.

The society also offers a range of additional benefits for both first-time buyers and home movers.

All standard mortgage valuations are now fee-free, while first-time buyers receive a £500 cashback to help with the cost of moving.

Remortgage customers are able to benefit from a free standard valuation and the choice between free standard legal work and £250 cashback.

Provider view

Henry Jordan, Nationwide’s head of mortgages, said: “We are reducing selected rates across the fixed and tracker rate product ranges for those with both large and small deposits. As well as offering a wide range of competitive mortgage rates, Nationwide also offers additional benefits to first-time buyers, home movers and those remortgaging to the society.”

Adviser view

Commenting on the two-year fix discounts, James Carter, principal at London-based Independent James, said: “The rates are pretty competitive. I think lenders now need to start looking at relaxing their lending criteria rather than lowering interest rates.

“It is good to have a choice between product fee and fee free options. Opting to pay a higher rate of interest in exchange for no product fee could benefit those seeking smaller loans.

“It seems that more people favour longer term fixes at this time. I have even had a couple looking at 10-year fixes. These loans have not been competitive in the past because interest rates have fallen, but they are more palatable now. A 10-year fix at say 2.39 per cent might represent good value over the fixed period.”

Charges

Ranges from fee free to £999.

Verdict

The residential mortgage market remains competitive, but the cuts on fixed-rate products are not as dramatic as they were in the turn of 2015, when many commentators held the view that a hike in base rates was imminent. How times have changed. The Bank of England is now forecast to hold record low interest rates amid the uncertainty over Brexit.

There are only so many times lenders can hack away at rates without it having an impact on their bottom line. Perhaps, as Mr Carter said, lenders should aim to one up each other by relaxing criteria.