Nationwide slashes mortgage rates following interest rate decision

Nationwide Building Society has announced it is cutting mortgage rates, following the Bank of England’s decision to suspend base rate increases today.

Starting tomorrow, the mortgage lender is cutting several fixed rate products by up to 0.31 percentage points.

It means Nationwide will host the cheapest five-year fixed rate product priced at 4.94 per cent.

It has outperformed Yorkshire BS, which launched a 4.99 per cent rate on Monday, and also Virgin Money, which today launched a five-year fixed rate of 4.97 per cent.

Nicholas Mendes, mortgage technical manager at broker John Charcol, welcomed Nationwide’s decision to cut rates further.

He said: ‘Nationwide has reacted quickly following today’s announcement, making further reductions to fixed rates.

‘Their latest reductions came last week, so seeing another price revision of their products so quickly is good news.

“It will be interesting to see if we see other lenders follow suit and move forward towards the end of the week.”

Nationwide’s cheapest 4.94 per cent fixed rate deals will require a five or 10-year lock-in.

The five-year solution is likely to prove popular given that it is, for now, the market leader. It is available to any eligible mover or first-time buyer, as long as they have at least a 25 per cent deposit. It also comes with a £999 fee.

The five-year average solution is currently 5.63 percent. This means someone getting the cheapest Nationwide deal on a £200,000 mortgage with a 25-year term would pay £1,162, compared to the market average of £1,244.

This could mean a saving of £4,920 over five years.

The mutual company has also launched a series of maximum interest rates for its other mortgage products.

For example, its cheapest two-year fixed rate deal, available only to home-movers (not first-time buyers) with at least a 40 per cent deposit, is now 5.44 per cent with a £999 fee.

This marginally beats Virgin Money’s 5.45 per cent deal with a fee of £1,295, which is the next cheapest two-year solution on the market.

With the average two-year fixed mortgage rate now 6.16 per cent, according to Rightmove, this Nationwide deal should be popular, particularly as borrowers increasingly opt for shorter fixed deals in the hope that the interest rates may begin to fall.

Someone taking out Nationwide’s cheapest two-year fixed deal on a £200,000 mortgage with a 25-year term would pay £1,221 compared to the market average of £1,308.

This could mean a total saving of £2,088 over the two-year period.

Meanwhile, those looking to remortgage have another decent option at the moment, thanks to Nationwide.

Nationwide’s cheapest five-year solution, which is available to those who have at least 40 per cent equity in their home (60 per cent loan-to-value), now charges interest at 5.2 per cent, with a product fee of £999.

There is a slightly higher rate of 5.26 percent for those who have at least 25 percent equity in their home.

Remortgage crisis: About 1.6 million people will see a fixed-rate mortgage deal expire next year, and substantially higher rates await most.

Compared to the rest of the market, it is outperformed by Yorkshire BS’s five-year fixed at a rate of 4.99 per cent (75 per cent loan-to-value ratio) and First Direct, which offers a rate of 5.14 percent (60 percent loan-to-value ratio). -appreciate).

Remortgage customers willing to pay a 10-year term with Nationwide could even reduce their rate to 5.04 per cent.

Approximately 800,000 fixed mortgage deals will end during the second half of this year and a further 1.6 million will be remortgaged next year.

Many will see their rate jump from less than 2 percent to just over 5 percent.

Will mortgage rates continue to fall?

Stephen Perkins, managing director of Norwich-based Yellow Brick Mortgages, believes further rate cuts are now certain to come.

He said: ‘There is a wave of rate cuts about to hit following the Bank of England’s decision to leave the base rate on hold today, which was better than lenders’ expectations of another rise.

‘This will give lenders confidence that we are near or at the peak and therefore they will continue their rate war to gain market share.

“This is great news for homeowners and those planning to buy, and will inject some adrenaline into the heart of the housing market.”

Samuel Bull, senior mortgage adviser at Huddersfield-based mortgage broker JB Mortgages, agreed that more lenders are likely to follow Nationwide’s lead.

He added: ‘Nationwide was quick to reduce its product range following the Bank of England’s decision to keep the base rate at 5.25 per cent.

‘Five-year swap rates are currently around 4.5 per cent, which would suggest it is only a matter of time before other lenders follow suit. Let the rate battle begin.