- From tomorrow, Nationwide will offer the lowest five-year fixed rate for purchases with a 5% deposit
Major lenders have today revealed further cuts to mortgage rates on fixed-rate deals.
Nationwide Building Society, NatWest and TSB have announced that they are changing the way they price their mortgages.
Those likely to benefit most from the latest wave of cuts are first-time homebuyers and those moving up and buying with smaller deposits.
The latest announcements follow Barclays and TSB, which cut mortgage rates earlier this week, including on deposit deals with a 5 per cent interest rate.
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Cheaper deals: Nationwide, NatWest and TSB to cut rates from tomorrow
Nationwide is cutting rates by up to 0.25 percentage points on two-, three- and five-year fixed products for those buying with deposits between 25 and 5 per cent of the purchase price.
From tomorrow, Britain’s biggest mutual fund will offer the lowest rate on the market for first-time buyers and home-movers who buy with a 5 per cent deposit.
Your five-year fixed contract will charge an interest rate of 5.04 per cent with a fee of £999. On a £200,000 mortgage to be repaid over 25 years, that equates to £1,174 a month.
Henry Jordan, director of housing at Nationwide Building Society, said: “These latest reductions will ensure we have some of the most competitive rates on the market, with a particular focus on supporting first-time buyers in what remains a challenging environment.”
Mark Harris, chief executive of mortgage brokers SPF Private Clients, added: ‘First-time buyers can take advantage of all the help they can get, particularly as they tend to pay higher mortgage rates than those with larger deposits.
‘These reductions are part of a general easing in mortgage prices and will be welcomed by those trying to move up the credit ladder.
‘Lenders are competing for new business, so where one goes at any given time, others tend to follow, meaning further price cutting by other lenders is possible.’
In another welcome change for first-time buyers and those with smaller deposits, NatWest also announced fixed rate cuts of up to 0.19 percentage points on selected products with loan-to-value ratios of 90 per cent and 95 per cent.
Ken James, director of Contractor Mortgage Services, told the Newspage news agency: ‘NatWest has just provided a massive boost to those with smaller deposits, sending a signal to other lenders that this is the end of the market that could benefit from more support.
‘We have seen that lenders have the ability to deliver these rate cuts and brokers are starting to see buyers returning to the market with a renewed sense of positivity.
“Hopefully this will spread to other lenders so we have more competition in these higher loan-to-value ratio brackets.”
TSB is also cutting rates, although not on the high loan-to-value ratio tranches, as rates change on deals requiring a deposit of 15 per cent or more.
From tomorrow, TSB will cut rates by up to 0.35 percentage points, with first-time buyers, home-movers and customers refinancing their mortgages set to benefit.
TSB says its rates will start from 3.79 per cent from tomorrow, close to the lowest rate on the market currently offered by NatWest of 3.77 per cent.