Nationwide slashes mortgage rates to 3.5% in ‘huge market statement’ | Personal Finance | Finance
Nationwide is slashing its fixed mortgage rates to as low as 3.50% as competition in the market continues to heat up. The UK’s biggest building society will offer a two-year fixed rate mortgage at 3.50% to existing and new customers looking to move home from Thursday (January 15).
Homeowners will need to have a 40% deposit to get the deal, which also has a £1,499 fee. The 3.50% rate being offered has been reduced by 0.08 percentage points, with Nationwide cutting rates by up to 0.20 percentage points across two, three and five-year fixed-rate products for new and existing customers – and by up to 0.17 percentage points for first-time buyers.
Mortgage deals set to be offered under the revamp also include a two-year fixed-rate mortgage at 3.75% for first-time buyers. That rate has been reduced by 0.17 percentage points. A 15% deposit is needed for the deal, which has a £999 fee.
First-time buyers also receive £500 cashback when they complete their mortgage with Nationwide.
Carlo Pileggi, Nationwide’s Head of Mortgage Products, said: “Rates starting at 3.50% for new and existing home movers will come as great news to those looking to move home in 2026.”
Nicholas Mendes, Mortgage Technical Manager at John Charcol, said Nationwide’s reductions “feel like a real line-in-the-sand moment”.
He said the 3.50% rate “will turn heads”, adding it is encouraging to see another major lender following “the sharper pricing” recently seen from Lloyds for Club Lloyds current account holders.
Darryl Dhoffer, founder of The Mortgage Geezer in Bedford, welcomed Nationwide’s move.
He said: “Nationwide just fired their starting gun for the 2026 property market. The UK’s biggest building society has slashed rates by up to 0.2%, unveiling a headline-grabbing 3.50% 2-year fixed deal for home-movers up to 60% loan-to-value with a £1,499 fee. This is a massive statement.
“With their last major change back in early December, this aggressive move signals that the ‘wait and see’ period is over. Breaking the 3.5% barrier proves lenders are hungry for volume and willing to squeeze margins to get it.
“It’s fantastic news for borrowers with equity and will likely trigger a domino effect across the Big Six. If you’ve been holding off on moving, the mortgage wars are officially back on.”
Andrew Montlake, Chief Exec at Coreco in London, said borrowers will benefit from what is now a mortgage rate war.
He added: “The fee may be high but the feel-good factor of rates hitting 3.5% will have a powerful effect on borrower sentiment.
“It has been a relatively quiet start to 2026 but now lenders are showing their hands and borrowers will be the ones that stand to benefit. Rates are moving in the right direction again.”
