Nationwide has confirmed it will reduce mortgage rates by up to 0.19% starting Tuesday, a move brokers say is welcome and likely to be followed by other lenders. The building society, which has branches in Birmingham, is cutting rates on a range of products for new and existing customers, including first-time buyers, those moving home, and people remortgaging.
Rate cuts across key products
The changes see Nationwide's cheapest two-year fixed rate fall from 4.54% to 4.52%, while the five-year fixed rate drops from 4.61% to 4.53%. Its cheapest two-year tracker remains unchanged at 4.09%. The reductions come after a period of rising swap rates, which have now eased, allowing the lender to pass on savings to borrowers.
Carlo Pileggi, Nationwide’s Head of Mortgage Products, said: “After a period of increasing swap rates, recent falls have created an opportunity for us to reduce mortgage rates, and we’re moving swiftly to ensure new and existing customers can benefit. These rate cuts will benefit a wide range of customers – first-time buyers, new and existing customers moving home as well as those remortgaging to Nationwide.”
Brokers predict market-wide response
Industry experts expect other lenders to follow Nationwide's lead, though they caution that the market remains volatile. Stephen Perkins, Managing Director at Norwich-based Yellow Brick Mortgages, said: "This is a reminder that mortgage pricing can move in both directions. Just a couple of weeks ago we were seeing lenders increase rates as swap rates rose. Now those funding costs have eased, Nationwide has been quick to pass some of that benefit on to borrowers. If swap rates remain lower, I'd expect other lenders to follow. The mortgage market remains highly competitive, so when one major lender moves, others rarely want to be left behind."
Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, added: "Nationwide are not normally the first to move, but this is a welcome cut after a few weeks of sharp increases in fixed rate pricing. Inevitably other lenders will follow throughout the week, this will be down to improving swap rates given the relative calm in the Middle East over the last few days, coupled with a traditionally quieter time for lenders."
Competitive landscape and borrower impact
Aaron Strutt, Product and Communications Director at London-based Trinity Financial, noted that Nationwide had been pushed out of best-buy tables by previous rate hikes. "The building society’s cheapest two-year fix is coming down marginally from 4.54% to 4.52% and the five-year fix is reducing from 4.61% to 4.53%. Its cheapest two-year tracker is staying at 4.09%. Nationwide has clearly been busy given the size of the previous rate hikes that pushed them out of the best buy tables. Hopefully a few more lenders will lower rates again and we can reverse the scale of the price rises we have seen recently," he said.
Strutt also highlighted that on Friday afternoon, lender Gen H sent a message to brokers saying that after last week’s swap rate spike, things have “turned right round,” allowing the lender to lower rates by up to 0.40%. He added: "Many borrowers are not going to fancy paying close to 4.5% for a fixed rate and they will expect that rates will come down again sooner rather than later. The Barclays 3.99% tracker seems to offer the best value at the moment even if there is a base rate hike."
What this means for borrowers
For Birmingham homeowners and buyers, the rate cuts provide some relief after several weeks of increases. However, experts warn that this is unlikely to become a straight race to the bottom. Mortgage rates remain sensitive to swap rate movements, which can change quickly. Borrowers should consider locking in competitive rates now, as further volatility is possible.
