Nationwide Building Society, along with Virgin Money, are the latest lenders to announce mortgage rate reductions, effective from tomorrow (May 12). They follow NatWest and Santander, which recently implemented similar cuts.
Rate Reductions Details
Nationwide is reducing selected fixed rates across its First Time Buyer, Home Mover, Existing Customers Moving Home and Remortgage product ranges by up to 0.36%. Virgin Money has also announced significant rate cuts across its Purchase range: 2-year fixed rates will drop by up to 0.26%, 5-year fixed rates by up to 0.24%, and Shared Ownership fixed rates by up to 0.26%. For remortgages, Virgin's 2-year fixed rates will decrease by up to 0.24% and 5-year fixed rates by up to 0.10%.
Comments from Industry Leaders
Carlo Pileggi, Head of Mortgage Products at Nationwide, said: "We're pleased to be cutting our mortgage rates once again, with the biggest reductions this time aimed at first-time buyers. Some of our biggest rate cuts are being made on our higher loan-to-value mortgages, which will help those with smaller deposits to take their first step on to the property ladder."
Nouran Moustafa, Practice Principal & IFA at Roxton Wealth, commented to Newspage: "These cuts are welcome, but borrowers should not assume they are guaranteed to last. Mortgage pricing is not only about lender appetite, but is influenced by swap rates, gilt yields and expectations around inflation and the Bank of England base rate. If geopolitical tensions escalate and oil prices move higher, that can quickly feed back into inflation fears and make markets more nervous. That is where cuts become fragile. I do not think borrowers should panic, but I also would not wait forever for a perfect rate. If a deal works for someone's budget and circumstances, it may be sensible to secure it, particularly where the lender allows a product switch before completion if pricing improves. The market is moving in the right direction, but still sensitive to global shocks."
Virgin, Nationwide, NatWest and Santander cutting rates is encouraging, but until inflation and geopolitical risks calm down, borrowers should see this as positive momentum rather than a guarantee cheaper deals will keep coming.
