Nationwide Building Society announces huge change to mortgage rates | Personal Finance | Finance
Nationwide has made a drastic cut to mortgage rates today as lenders are “at each other’s throats” for the best rates. The building society reduced mortgage rates to as low as 3.89 percent, slashing fixed rate mortgages by up to 0.25 percentage points on first-time buyer and home mover ranges.
When questioned by Newspage, many brokers believed this could signal the start of a lender price war. Ben Perks, Managing Director at Orchard Financial Advisers, commented: “It’s heating up and lenders are at each other’s throats as another major player cuts their rates to compete for business. The rates are starting to become very attractive for borrowers as market conditions continue to improve. Game on.”
Two-year and five-year fixed rates have been set at 3.89 percent for borrowers with a 40 percent deposit, with a £1,499 fee.
First-time buyers will be offered a two-year fixed-rate mortgage at 4.09 percent, which requires a 40 percent deposit and carries a £1,499 fee.
Riz Malik, Director at R3 Wealth commented: “Given current market movements, the next seven days may see even more cuts as the expectation for future rate cuts increases.”
Michelle Lawson, Director at Lawson Financial, added: “It’s quite an entrance from one of the UK’s biggest mortgage lenders. Lenders are seriously locking horns right now.”
Justin Moy, Managing Director at EHF Mortgages, said: “With lenders starting to put pressure on each other to keep some momentum in the home purchase market, I would expect to see more lenders do the same, pricing differently for home movers, first-time buyers and those remortgaging.”
The cuts were announced as both HSBC UK and First Direct revealed changes to stress rates used in their affordability calculations.
First Direct has applied rate reductions of up to 0.14 percentage points across more than 100 products.
HSBC UK will allow some customers to borrow larger amounts as part of a mortgage, which it estimates could enable 20,000 more customers to get mortgages from the bank.
