The Cosmic Watchdog

Nationwide is reducing mortgage rates by up to 0.25 percentage points across selected two, three and five-year fixed rate products with the new rates effective from tomorrow (February 28).

The rate changes mean a borrower with an average outstanding mortgage of £132,378 could save up to £331 interest a year, if they take out a five year fixed rate with the lender.

Nationwide’s lowest mortgage rate is 3.99%, which is available to existing customers looking to move to a new deal and to new customers looking to remortgage.

Carlo Pileggi, senior manager mortgages at Nationwide, said: “Our third set of rate cuts in three weeks should come as great news for borrowers.

“We remain as committed as ever to supporting all segments of the market, including those buying their first home or moving to their next, and with our switcher and remortgage rates starting from 3.99%, we aim to be front of mind for those looking for a new deal too.”

Switcher mortgages for existing Nationwide customers coming to the end of their current mortgage deal have been reduced by 0.17% across selected two, three and five-year products up to 90% LTV with rates starting from 3.99%.

These include:

• Five-year fixed rate at 60% LTV with a £999 fee is 3.99% (reduced by 0.13%)
• Two-year fixed rate at 60% LTV with a £999 fee is 4.09% (reduced by 0.15%)
• Five-year fixed rate at 75% LTV with no fee is 4.32% (reduced by 0.17%)

Nationwide has also reduced rates on its remortgage products by up to 0.15% across two, three and five-year fixed rate products up to 90% LTV with rates starting from 3.99%.

• Five-year fixed rate at 60% LTV with a £1,499 fee is 3.99% (reduced by 0.13%)
• Two-year fixed rate at 60% LTV with a £1,499 fee is 4.09% (reduced by 0.15%)
• Five-year fixed rate at 60% LTV with no fee is 4.24% (reduced by 0.14%). 

Nationwide is also cutting selected fixed rates for both first-time buyers and those looking to move to their next home.

First-time buyers will see rates reduced by up to 0.25% across two, three and five-year fixed rate products up to 95% LTV, including:

• Five-year fixed rate at 90% LTV with a £999 fee is 4.74% (reduced by 0.25%)
• Two-year fixed rate at 85% LTV with no fee is 4.99% (reduced by 0.06%)
• Three-year fixed rate at 75% LTV with a £999 fee is 4.39% (reduced by 0.05%)

New customers moving home will see their rates reduced by 0.14% across two, three and five-year fixed rate products up to 95% LTV, including:

• Five-year fixed rate at 60% LTV with a £1,499 fee¹ is 4.02% (reduced by 0.07%)
• Three-year fixed rate at 60% LTV with a £999 fee is 4.09% (reduced by 0.10%)
• Five-year fixed rate at 85% LTV with a £999 fee is 4.39% (reduced by 0.06%)

Interest rates for customers moving home have been been reduced by 0.10% across two, three and five-year fixed rate products up to 95% LTV, including:

• Five-year fixed rate at 60% LTV with a £1,499 fee¹ is 4.02% (reduced by 0.07%)
• Three-year fixed rate at 60% LTV with a £999 fee is 4.09% (reduced by 0.10%)
• Five-year fixed rate at 85% LTV with a £999 fee is 4.39% (reduced by 0.06%)

Nationwide’s move was welcomed by mortgage experts.

Nicholas Mendes, mortgage technical manager at John Charcol said fixed-rate mortgages were edging lower due to a decline in swap rates, particularly across two- and five-year terms.

“Currently, these swaps have fallen below 4%, marking a significant drop compared to last month. However, the narrow gap between two-year and five-year swap rates means lenders still face constraints in comfortably introducing sub-4% deals, particularly on shorter fixes. Santander’s recent move to offer a two-year fixed rate below 4% illustrates how lenders are balancing competitive pricing with risk management.”

Steve Humphrey, founder at The Mortgage Pod said: “I expect this to be the first of many lenders reducing in the current climate. It’s also great to see Nationwide are keen to play their part in the upcoming mortgage lender rate war, which we certainly hope will continue.”

Pete Mugleston, managing director at Online Mortgage Advisor said: “Nationwide’s latest round of rate cuts is more great news for borrowers and reflects increasing competition among lenders as funding costs continue to ease. With swap rates stabilising, we could see further reductions.

“However, while rates may edge down in the short term, significant cuts are unlikely.

“Instead, we’ll likely see more lenders making incremental cuts to rates as the weeks go on. Borrowers should remain proactive. Waiting too long could mean missing the best deals, as lenders adjust pricing based on demand. If inflation remains under control and market sentiment stays positive, we may see a gradual softening of rates but not a return to historic lows.”

Jamie Elvin, director at Strive Mortgages said: “With lenders jostling for market share and the cost of funds falling, further reductions look likely, especially as the month-end approaches and banks push to meet lending targets.

“Competition is clearly ramping up, and borrowers could be in for even better deals in the weeks ahead. This isn’t just a one-off adjustment, it’s a sign that rates may have further to fall.”