Mortgage prices have fallen further this week, with refinancing customers now benefiting from interest rate cuts.
In the latest round of price cuts, Nationwide has unveiled a sub-4% remortgage deal, which is a five-year fixed rate for those who need to borrow at a Loan-to-Value (LTV) of 60%.
It has a rate of 3.99% and comes with a £999 fee, and the LTV level means borrowers need 40% equity to qualify.
However, up until the point last week when Nationwide announced this deal, the only mortgages were with rates below 4% were for home purchases.
Nationwide’s announcement therefore came as great news for anyone coming off record low fixed rate deals and hoping prices would fall when they came looking for a new mortgage.
Nationwide also revealed it was offering a five-year solution for home buying customers, with 40% equity at 3.78%. This involves a fee of £1,499.
Mark Harris, CEO of mortgage broker SPF Private Clients, said: “A five-year premium of less than 4% is great news for those considering refinancing and is the first to be available since the end of February.
“Until now, lenders have targeted movers with rates below 4%, but competition between the ‘big six’ lenders is driving rates down and now those who refinance are also seeing the benefits.”
He added: “With markets expecting further rate cuts, we can expect a 3.5% recovery over five years by the time we get to that point. Christmaswhich will be a huge psychological boost for the market.”
Customers applying for a mortgage must ‘stay alert’
Over the past week, the average two-year fixed interest rate has fallen from 5.62% to 5.58%. Meanwhile, the five-year option has also fallen from an average of 5.25% to 5.22%, according to the latest data from Moneyfacts.
As lenders become competitive and make announcements interest rate cuts Customers who are in the process of taking out a mortgage are regularly urged to remain alert so as not to miss out on price reductions.
Hannah Bashford, director of Model financial solutionsvia the Newspage agency, said: “It is now more important than ever to look at the whole market and ensure that when you make a purchase or take out a new mortgage, you follow the rates.
“In the past six weeks alone, I have made four changes to one customer’s mortgage application. If you choose direct, a lender will simply not notify you of these changes or encourage you to adjust your rate.