- Nationwide will cut rates by up to 0.3 percentage points from tomorrow
- Virgin Money is also cutting rates on some of its products
- Mortgage brokers are waging a 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 reduce rates at selected stores by up to 0.3 percentage points.
It means Nationwide will now be home to the lowest fixed rate on the market, with its cheapest five-year fixed contract starting at 4.18 per cent with a fee of £1,499.
Virgin Money is also cutting rates with some home buyers, remortgagers and buy-to-let investors likely to benefit from the changes.
Mortgage cuts: Nationwide is the latest lender to announce it will review mortgages
Today’s announcements follow mortgage rate cuts from Barclays, HSBC, Yorkshire Building Society, Santander and Halifax last week.
Mortgage brokers welcomed the news as another win for borrowers with mortgage interest rates on the decline and prime rate cuts on the horizon.
Jack Tutton, director of SJ Mortgages, told Newspage: “The rate cut momentum continues as Nationwide and Virgin followed several other lenders last week.
“The price war is now well and truly underway. With Nationwide cutting some of its rates by 0.3 per cent, this should prompt more lenders to cut further to stay competitive. This is even more positive news for borrowers.”
Hannah Bashford, director of Model Financial Solutions, added: “The rate battle is over. This can only be good news for borrowers, and hopefully the scramble for the top will mean rates fall below the magical 4 per cent threshold that everyone is so desperate to break.
“If the Bank of England cuts rates in August, it will look like a game, set and match.”
For anyone moving home with a deposit of 40 per cent or more, Nationwide’s top rate on the market will be 4.18 per cent from tomorrow.
However, it comes with a hefty £1,499 product fee, meaning it may not be the cheapest overall.
Santander is also offering 4.2 per cent with a £999 fee and HSBC is offering 4.22 per cent with a £649 fee.
Nationwide is also now offering the lowest two-year fix for home movers with a 40 per cent deposit or more.
Its 4.59% deal is down from 4.79% and comes with a £1,499 fee.
> Find the best rate for you with Money’s mortgage finder
Also cut: Virgin Money has also cut rates on a number of its fixed rate deals aimed at home buyers, home owners and buy-to-let investors
First-time buyers will also benefit from Nationwide’s changes. Those buying with a 25 per cent deposit can now secure a three-year fix at 4.77 per cent with a £999 fee.
Nationwide is also cutting rates on some of its remortgage deals as well as its products aimed at existing customers looking to switch.
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’s also cutting rates aimed at people remortgaging, with rates starting at 4.54 percent.
However, buy-to-let rates are falling most significantly.
It says some fixed rates with a 1% fee will be cut by 0.12 per cent, starting at 4.55 per cent, while product transfer fixed rates will be cut by up to 0.2 percentage point, starting at 4.49 per cent.