Nationwide has cut rates by up to 0.31% on most of its fixed rate mortgages following the Bank of England’s decision to hold interest rates.
SWAP rates, which are used by lenders to decide how to set their own interest rates, also fell to below 5% leading to expectations more mortgage providers will follow in the footsteps of Nationwide.
It comes following several weeks of mortgage rate reductions and has been hailed as a welcome development by mortgage brokers across the country.
Darryl Dhoffer, founder of Bedford-based The Mortgage Expert, speaking via news agency Newspage said: “The Bank of England pulled the handbrake on Base Rate rises and SWAPS reacted with the two-year fixed below 5%. This is the best news we have heard in months.
“Surely it is a matter of days before lenders react and launch more competitive two-year fixed rate deals, and dare I say it in the coming weeks the Big Six lenders come out with two year deals beginning with a 4. As Delia Smith once said ‘let’s be having you’.”
What are the best mortgage rates today?
Average two-year fixed rates are currently at 6.56%, having fallen from 6.58% yesterday, according to Moneyfacts. Five-year fixes, meanwhile, are averaging 6.06% having dipped from 6.07% yesterday.
Nationwide’s rate cuts, which have come into effect today, mean homeowners who need to borrow up to 75% of their property’s value could be eligible for a rate of 4.94%. It comes with a £999 fee.
But it’s not the only lender with sub-5% rates on offer.
Katie Brain, banking expert at Defaqto, the independent financial information and ratings business, said: “This is great news for borrowers, particularly the half-million borrowers who are coming out of their fixed rate deals in the next few months. We have started to see some fixed rates below 5% which is encouraging.”
As of Thursday 21 September, the best two-year fixed rate for a remortgage was 5.74% with a £490 being offered by First Direct for those who need a 75% loan-to-value (LTV) product, according to Defaqto.”
Aside from Nationwide’s offering, in the five-year fixed rate market the other product being highlighted is Yorkshire Building Society’s mortgage for 85% LTV borrowers.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “Yorkshire Building Society has reduced rates across selected fixed deals this week, including its five-year fixed mortgage at 85% loan-to-value.
“Now priced at 5.31% and fixed to 30 November 2028, the deal offers both a free valuation alongside £250 cashback, and borrowers can also add the £495 product fee to the advance of the mortgage. Overall, this product earns an Excellent Moneyfacts product rating.”
