Nationwide is to cut selected fixed rate mortgages by up to 0.5 per cent for both homebuyers and remortgagors from tomorrow (31 October).
The building society said it is looking to offer both new and existing customers the opportunity to secure competitive rates as they consider a new mortgage deal ahead of a potential rise in the Bank of England base rate.
The biggest reduction of 0.5 percentage points is being made on 10-year fixed rate products, which will start at 2.49 per cent for the 60 per cent loan-to-value (LTV) product with a £999 fee and 2.59 per cent with no fee.
Meanwhile, Nationwide's 60 per cent loan-to-value (LTV) two-year fix rate is being reduced by 0.15 percentage points and will start at 1.29 per cent with a £999 fee, and 1.69 per cent with no fee.
Two-year fixes for those with a 10 per cent deposit are being reduced to 1.99 per cent with a £999 fee and 2.39 per cent with no fee.
The lender’s five-year fixed rate mortgage product up to 60 per cent LTV will start at 1.79 per cent with a £999 fee and 1.99 per cent with no fee.
Rate reductions are also being made on tracker products and shared equity mortgages.
Nationwide stated existing members can switch to the same products as new customers, with an additional £100 cashback as a thank you for their loyalty.
Henry Jordan, Nationwide’s director of mortgages, said: “As the likelihood of a rise in the Bank of England base rate increases, mortgage holders will be considering their options.
"The changes announced today (30 October) offer improved choices across our range and are equally available to new customers and to existing members switching product with us.”
Martin Stewart, director of London Money, said the rate cut to the 10-year fix “tells me that long-term money is not expecting interest rates to go much further or too high, too fast.
"The market expectation is for a continuation of the low interest-rate environment we are in.”
Commenting on the two-year fixed rate reductions, he said: “This is like the sales you get at the supermarket. They put the prices up the week before the sales start and then drop them down to the week before that. It is a degree of marketing.
“To me, this is more evidence that if the base rate does increase, all it will do is put us back to 15 months ago, not 2007.
"People think it is the end of the world – we need to get it all in perspective.”
simon.allin@ft.com
