Nationwide changes mortgage rates with new deals for first-time buyers

Nationwide is slashing mortgage rates by up to 0.30 percentage points, handing a lifeline to cash-strapped borrowers and reigniting hopes for first-time buyers with deals dipping below the 4% mark for the first time since September.

The building society’s lowest rate now stands at 3.84%, available to both new and existing customers looking to move home. It applies to selected two- and five-year fixed rate deals and takes effect from Wednesday, May 7.

In a significant boost for first-time buyers, rates are dipping under the crucial 4% threshold. The cheapest deal comes in at 3.94% for a two-year fixed rate at 60% loan-to-value (LTV) with a £1,499 fee – the first sub-4% offering in over seven months. A similar deal with a lower fee of £999 is also available at 3.99%.

The move marks Nationwide’s third rate cut in just three weeks, as lenders battle it out in a fiercely competitive mortgage market amid expectations that the Bank of England may trim the base rate on Thursday.

The latest changes include reductions for buyers with smaller deposits, while Helping Hand products – which allow eligible first-time buyers to borrow up to six times their income – remain available up to 95% LTV.

Highlights for first-time buyers include:

3.94% on a 2-year fixed at 60% LTV with a £1,499 fee (cut by 0.15%)

3.99% on a 2-year fixed at 60% LTV with a £999 fee (cut by 0.15%)

4.54% on a 5-year fixed at 85% LTV with no fee (cut by 0.30%)

4.85% on a 2-year fixed at 95% LTV with a £999 fee (cut by 0.27%)

Existing borrowers and movers benefit too

Those remortgaging or moving home will also see cuts of up to 0.30 percentage points, with stand-out rates such as:

3.84% on a 2-year fixed at 60% LTV with a £1,499 fee for movers

4.19% on a 2-year fixed at 85% LTV with a £999 fee

5.02% on a 3-year fixed at 95% LTV with a £999 fee

4.49% on a 10-year fixed at 75% LTV with a £999 fee for remortgagers

Nationwide said it remains committed to its pricing pledge, ensuring existing mortgage customers switching products will not pay more than those remortgaging from other lenders.

Carlo Pileggi, Nationwide’s Senior Manager – Mortgages, said: “We’re pleased to be able to make our third rate cut in three weeks as we strive to remain one of the most competitive lenders in the market. This latest round of changes includes us offering sub-four percent rates for first-time buyers, as well as reducing rates across our Helping Hand mortgages, which enable eligible first-time buyers to borrow up to six times their income up to 95 per cent loan-to-value.”

Brokers welcomed the move, warning that while conditions are improving, borrowers shouldn’t delay.

Ranald Mitchell, Director at Charwin Mortgages, told Newspage: "Nationwide haven't just trimmed rates, they’ve taken a sledgehammer to them... now’s the time to act. These deals won’t hang around forever."

Rob Peters of Simple Fast Mortgage added: "Nationwide is seriously turning up the heat... these rate cuts will help borrowers make the most of it."