- Starting tomorrow, Nationwide will reduce rates by up to 0.3 percentage points
- Virgin Money is also reducing rates on some of its products
- Mortgage brokers declare price war as lenders compete for business
Mortgage brokers say a home loan price war is underway after Nationwide Building Society became the latest lender to cut its rates.
From tomorrow, Britain’s largest building society will cut interest rates on certain transactions by up to 0.3 percentage points.
This means Nationwide will now offer the lowest fixed rate on the market, with its cheapest five-year fixed deal starting at 4.18 per cent with a fee of £1,499.
Virgin Money is also cutting rates and some home buyers, remortgagers and buy-to-let investors are likely to benefit from the changes.
Mortgage cuts: Nationwide is the latest lender to announce it will tweak mortgage pricing
Today’s announcements follow mortgage rate cuts from Barclays, HSBC and Yorkshire Building Society. Santander and Halifax last week.
Mortgage brokers welcomed the news as another victory for borrowers, with mortgage rates on the decline and base rate cuts on the horizon.
Jack Tutton, director of SJ Mortgages, told the Newspage news agency: ‘The push towards rate cuts continues as Nationwide and Virgin followed in the footsteps of several other lenders last week.
“The price war is already underway. With Nationwide cutting some of its rates by 0.3 per cent, this should prompt more lenders to make further cuts to remain competitive. This is another positive piece of news for borrowers.”
Hannah Bashford, director at Model Financial Solutions, added: “The rate battle is upon us. This can only be good news for borrowers and hopefully the fight over the cap will see rates fall below that magical 4 per cent barrier that everyone is so desperate to break.”
“If the Bank of England cuts rates in August, it will look like everything is fine.”
For anyone moving home with a deposit of 40 per cent or more, Nationwide’s 4.18 per cent will be the market-leading rate from tomorrow.
However, it does come with a hefty product price tag of £1,499, meaning it may not be the cheapest overall.
Santander also offers a 4.2 per cent deal with a fee of £999 and HSBC offers a 4.22 per cent deal with a fee of £649.
Nationwide is also now offering the lowest repair rate in two years for those moving in with a deposit of 40 per cent or more.
Its 4.59 per cent deal drops from 4.79 per cent and comes with a £1,499 fee.
> Find the best rate for you using This is Money’s mortgage finder
Also cutting rates: Virgin Money has also cut rates on a number of its fixed-rate deals aimed at home buyers, homeowners and buy-to-let investors.
First-time buyers will also benefit from Nationwide’s changes. Those who buy with a 25 per cent deposit can now get a three-year fixed rate of 4.77 per cent with a fee of £999.
Nationwide is also lowering rates on some of its refinance offerings, as well as all of its products aimed at existing customers looking to transfer their mortgage.
Virgin Money’s rate changes are aimed at those buying with smaller deposits, particularly those who need 10 per cent of the purchase price.
But it is also cutting rates for people refinancing their mortgages, with rates starting at 4.54 percent.
However, it is their buy-to-let rates that are seeing the most significant cuts.
It is stated that certain fixed rates with a 1 percent commission will be reduced by 0.12 percent and start from 4.55 percent, while fixed rates for product transfers will be reduced by up to 0.2 percentage points and start from 4.49 percent.
