Major lender cuts mortgage rates to best buys days after Halifax, Barclays and HSBC offer better deals

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One of Britain’s biggest mortgage lenders has announced it will cut rates on its home loans to best buy levels.

From tomorrow, Nationwide Building Society will lower mortgage rates by up to 0.2 percentage points across its fixed rate deals. 

It follows hot on the heels of Barclays, HSBC, and Halifax, which also announced rate cuts in recent days.

Nationwide’s lowest two-year fixed rate will stand at a market leading 3.81 per cent.

The deal, which is available to both new and existing customers buying with at least a 40 per cent deposit and comes with a £1,499 fee.

On a £200,000 mortgage being repaid over 25 years that would work out as paying £1,035 a month.

Dominoes: Nationwide has made a move to lower mortgage rates after other major lenders made similar changes in recent days

Those moving home with smaller deposits will also benefit from Nationwide’s changes.

Someone with a 10 per cent deposit will be able to secure a market leading 4.34 per cent five-year fix with a £1,499 fee from tomorrow.

There is good news for first-time buyers as well. A first-time buyer with a 10 per cent deposit will be able to secure a five-year fixed rate of 4.39 per cent with a £999 fee from Nationwide.

Meanwhile, a first-time buyers with a 25 per cent deposit will be able to bag a 4.2 per cent three-year fix, also with a £999 fee. 

With hundreds of thousands of households still to remortgage this year, Nationwide’s is also lowering rates in this area.

Its lowest two-year fix for households with at least 40 per cent equity in their home will be 3.89 per cent from tomorrow – albeit with a £1,499 fee.

Nationwide’s changes lookm like a direct response to Halifax and Barclays, which both announced rate reductions last week.

Halifax has just launched a 3.84 per cent two-year fix targeting borrowers buying a home and Barclays has a 3.92 per cent five-year fix for those needing to remortgage. 

For those prepared to do something different than locking in for the standard two or five years, MPowered Mortgages has a three-year fix at 3.88 per cent for those buying with at least a 40 per cent deposit.

‘Nationwide is the latest big lender to lower its rates and undercut its competitors,’ said Aaron Strutt of Trinity Financial. 

‘Its new rates are cheap enough to top the best buy tables especially if you have a large deposit.

‘It has acted quickly to lower rates and undercut Halifax by launching a 3.81 per cent two-year fix and a 3.92 per cent five-year fix for mortgages between £300,000 and £5 million. 

‘These are property purchase products.’

Strutt expects more lenders to cut mortgage rates over the coming weeks due to competition ramping up. 

‘Five of the big six biggest lenders have lowered their rates and no doubt other lenders will follow their lead,’ he said.

‘If you are offered a sub-4 per cent rate at the moment you are doing pretty well. You just need to decide how long you want to fix for and that really comes down to your attitude to rise. 

‘Lots of people are still taking two-year fixes as they think rates will come down more.

‘With £147bn worth of mortgages coming up for renewal between now and December this latest round of rate cuts which come as welcome news for homeowners needing to remortgage.’

How to find a new mortgage

Borrowers who need a mortgage because their current fixed rate deal is ending, or they are buying a home, should explore their options as soon as possible. 

Buy-to-let landlords should also act as soon as they can. 

Quick mortgage finder links with This is Money’s partner L&C

> Mortgage rates calculator

> Find the right mortgage for you 

What if I need to remortgage? 

Borrowers should compare rates, speak to a mortgage broker and be prepared to act.

Homeowners can lock in to a new deal six to nine months in advance, often with no obligation to take it.

Most mortgage deals allow fees to be added to the loan and only be charged when it is taken out. This means borrowers can secure a rate without paying expensive arrangement fees.

Keep in mind that by doing this and not clearing the fee on completion, interest will be paid on the fee amount over the entire term of the loan, so this may not be the best option for everyone. 

What if I am buying a home? 

Those with home purchases agreed should also aim to secure rates as soon as possible, so they know exactly what their monthly payments will be. 

Buyers should avoid overstretching and be aware that house prices may fall, as higher mortgage rates limit people’s borrowing ability and buying power.

What about buy-to-let landlords

Buy-to-let landlords with interest-only mortgages will see a greater jump in monthly costs than homeowners on residential mortgages.

This makes remortgaging in plenty of time essential and our partner L&C can help with buy-to-let mortgages too. 

How to compare mortgage costs 

The best way to compare mortgage costs and find the right deal for you is to speak to a broker.

This is Money has a long-standing partnership with fee-free broker L&C, to provide you with fee-free expert mortgage advice.

Interested in seeing today’s best mortgage rates? Use This is Money and L&Cs best mortgage rates calculator to show deals matching your home value, mortgage size, term and fixed rate needs.

If you’re ready to find your next mortgage, why not use L&C’s online Mortgage Finder. It will search 1,000’s of deals from more than 90 different lenders to discover the best deal for you.

> Find your best mortgage deal with This is Money and L&C

Be aware that rates can change quickly, however, and so if you need a mortgage or want to compare rates, speak to L&C as soon as possible, so they can help you find the right mortgage for you. 

Mortgage service provided by London & Country Mortgages (L&C), which is authorised and regulated by the Financial Conduct Authority (registered number: 143002). The FCA does not regulate most Buy to Let mortgages. Your home or property may be repossessed if you do not keep up repayments on your mortgage