Nationwide has cut mortgage rates in a move, meaning the lowest deal is now available at 3.5%.
It’s been hailed as a ‘line in the sand’ moment by one broker, who said it was a ‘strong headline rate’.
It comes as most of the big six lenders have have had their mortgage reduced prices and just weeks after the Bank of England cut interest rates to 3.75%.
Today, Nationwide joined this trend and reduced mortgage interest rates by up to 0.20% for first-time buyers and home movers.
The lowest rate is 3.5%, which is available for a two-year fixed rate with a loan-to-value (LTV) of 60% and a fee of £1,499. This means that only those with a deposit of at least 40% are eligible.
However, the fact that mortgage rates have fallen so low is seen as significant by experts.
Nicholas Mendes, mortgage technical manager at John Charcol, said: “Nationwide’s latest cuts feel like a real ‘in the sand’ moment, and a benchmark that other lenders will be watching closely.
“A two-year fixed interest rate of 3.5% for movers and an LTV of 60% is a high percentage that will attract attention.”
He added: “Competition is clearly increasing. HSBC has also reduced prices on parts of its range for home movers and first-time buyers, including at higher LTVs, reinforcing that competition is still doing much of the heavy lifting here.”
Mendes joined the chorus of expert voices urging borrowers to take out a mortgage in the near future: to act now.
“For anyone coming off a fixed rate in the next six months, I wouldn’t delay. If you leave it too late you risk losing the choice and ending up in a fallback rate in the meantime,” he advised.
“Any further decline from here on out will be marginal rather than dramatic. In most cases, it’s better to secure something now and then shift down if prices improve before completion, rather than trying to time the bottom.
“A good broker can help manage that process, keep things moving and ensure you can take advantage of any further rate reductions before you’re done.”