Nationwide Cuts Mortgage Rates
Although favouring those with larger deposits, Nationwide has cut many of its mortgage rates. With the swap rate having come down in recent weeks, it is hoped that Nationwide’s move will prompt some competition in the market.
There is some good news at last for homeowners. Nationwide, Britain’s biggest building society, has cut some of its mortgage rates.
Both Nationwide’s fixed and tracker rates have been reduced by 0.46% - for customers who have a deposit of at least 25%. The cheapest two-year fixed rate at Nationwide is now 6.18% with a £599 fee.
The building society has also reduced fixed rates for those with less of a deposit, but the rates are still above 6.5% for people who need to borrow more than 75% of the value of the house.
Other lenders have also shaved rates in the past couple of weeks – Abbey, Cheltenham & Gloucester and Woolwich – but again, the best deals are available to those with larger deposits.
Nationwide’s lifetime tracker received the biggest cut, down by 0.46% so that it is now base rate plus 0.98% (thus, currently 5.98%). A deposit of 25% is required and there’s a £599 fee.
Anyone with a 10% deposit has seen a similar reduction, bringing the rate to base rate plus 1.38%. Only existing borrowers with Nationwide can take out one of their mortgages with a deposit of 10% or less, except for the three-year fixed rate at 6.93% or a tracker at base rate plus 1.44%. Although the tracker rate has actually gone up by 0.1%, the good news is that the fee on these latter two mortgages is down to £299 for first-time buyers.
The lifetime tracker does have one drawback. If you redeem the mortgage in the first five years there’s a 3% early repayment charge.
Nevertheless, Nationwide’s moves are encouraging for the mortgage market. The key driver for fixed rates is the swap rate, and this has come down by 0.7% from its peak a month ago.
It is to be hoped that Nationwide’s move will spark some much needed competition into the market to help bring mortgage rates down across the board, which will in turn boost the property market.
