The changes will affect first-time buyers, home movers and borrowers looking to remortgage. While Nationwide is reducing selected fixed rates by up to 0.15 percentage points, some tracker mortgages will become more expensive, highlighting the different pricing approaches being taken across the market.
Nationwide Reduces Fixed Mortgage Rates Across Several Products
According to Nationwide’s announcement on 3 November, fixed mortgage rates will fall by up to 0.15 percentage points across selected two, three and five-year deals. The reductions cover products for first-time buyers, existing customers moving home and those remortgaging.
For first-time buyers, a two-year fixed mortgage at 85% loan-to-value (LTV), with no product fee, will fall by 0.10 percentage points to 5.48%. Another two-year deal at 60% LTV, carrying a £999 fee, will decrease by 0.15 percentage points to 5.06%.
First-time buyers will also continue to receive £500 cashback when completing their mortgage with Nationwide. Those purchasing energy-efficient properties may qualify for additional cashback of up to £500 through the lender’s Green Reward scheme, depending on the property’s energy rating.
Customers moving home will see reductions of up to 0.13 percentage points. Nationwide’s lowest advertised fixed rate will be 4.89% for a five-year mortgage at 60% LTV, subject to a £1,499 product fee.
A two-year fixed deal at 90% LTV, with a £999 fee, will fall to 5.25%, while a five-year mortgage at 75% LTV, without a fee, will decrease to 5.16%.
Remortgage customers will also benefit from selected reductions. A two-year fixed mortgage at 60% LTV, with a £999 fee, will fall to 4.99%, while a three-year fee-free deal at the same LTV will decrease to 5.34%.
Nationwide’s head of mortgage products, Carlo Pileggi, said current market conditions were allowing the lender to reduce fixed rates across its range.
Virgin Money Follows With Reductions As Tracker Rates Increase
Virgin Money, which is owned by Nationwide, is also reducing several fixed mortgage rates from Wednesday. According to the Mirror, purchase two-year fixed rates will fall by up to 0.12 percentage points, while five-year deals will decrease by up to 0.13 percentage points.
Shared ownership fixed rates will be reduced by up to 0.10 percentage points. For remortgage customers, two-year fixed rates will fall by up to 0.10 percentage points, with reductions of up to 0.17 percentage points on five-year products.
Nationwide is taking a different approach to a small number of tracker mortgages. Rates on selected two-year tracker deals at 80% LTV and above will increase by up to 0.10 percentage points.
Speaking to Newspage, mortgage broker Doug Miller explained that fixed rates are largely influenced by swap rates, while tracker mortgages follow the Bank of England’s base rate.
Mortgage adviser Rohit Kohli also warned that borrowers taking out affected tracker deals could face another increase if the Bank of England raises its base rate.
The changes come after Barclays and Halifax announced mortgage rate cuts earlier in the week, leaving borrowers with lower prices on selected fixed deals but higher starting rates on some Nationwide trackers.
