Nationwide leads with cuts of up to 0.36% as NatWest and Virgin Money also price down fixes
Nationwide, NatWest and Virgin Money are all cutting fixed mortgage rates from Tuesday, 12 May, with Nationwide offering reductions of up to 36 basis points (bps) across two-, three-, and five-year fixed rate products.
First-time buyer rates are being reduced by up to 36bps across products up to 95% loan-to-value (LTV). Among the new rates, the five-year fixed at 90% LTV with a £999 fee will be 4.89% (down 36bps), the five-year fixed at 85% LTV with a £999 fee will be 4.79% (down 34bps), the two-year fixed at 85% LTV with a £999 fee will be 4.69% (down 26bps), and the two-year fixed at 60% LTV with a £1,499 fee will be 4.48% (down 18bps).
First-time buyers completing a mortgage with Nationwide will also receive £500 cashback. Those purchasing an energy-efficient property may qualify for a further cashback of up to £500 through the lender's Green Reward scheme.
Existing and new customers moving home will see reductions of up to 24bps across two-, three-, and five-year fixed products up to 95% LTV. Selected new rates include the two-year fixed at 60% LTV with a £1,499 fee at 4.35% (down 15bps), the five-year fixed at 60% LTV with a £999 fee at 4.49% (down 24bps), the five-year fixed at 75% LTV with a £999 fee at 4.59% (down 19bps), and the two-year fixed at 90% LTV with a £999 fee at 4.89% (down 20bps).
Nationwide says existing customers who are moving home continue to be offered rates equal to or lower than those available to new customers.
Remortgage rates are being reduced by up to 24bps across two-, three-, and five-year fixed products up to 90% LTV. The two-year fixed at 75% LTV with a £999 fee will be 4.76% (down 24bps), the two-year fixed at 60% LTV with a £1,499 fee will be 4.63% (down 22bps), and the five-year fixed at 85% LTV with a £999 fee will be 4.94% (down 6bps).
"We're pleased to be cutting our mortgage rates once again, with the biggest reductions this time aimed at first-time buyers," said Carlo Pileggi, head of mortgage products at Nationwide. "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. However, Nationwide remains an all-round lender and these rate cuts reflect our broader aim of supporting customers at every stage of homeownership."
As a result of the latest rate reductions, Nationwide's lowest rate will fall to 4.35%.
"This is good news," said Aaron Strutt (pictured right), product director at broker Trinity Financial. "Nationwide is lowering rates and offering a market leading two-year fix at 4.35% and a best buy 4.44 five-year fix.
"Borrowers need to raise between £300,000 and £5 million to access Nationwide's lowest rates, but the rates are not that much more expensive if you want a smaller loan size. Mortgage rate reductions of up to 0.36% make a real difference to monthly mortgage repayments.
"Nationwide's lowest two-year fixes for first-time buyers with a 10% deposit will start from 4.86% which again looks much more attractive than previous times in recent months."
Virgin Money is also making rate changes from tomorrow.
On purchase products, two-year fixed rates will fall by up to 26bps, five-year fixed rates by up to 24bps, and shared ownership fixed rates by up to 26bps.
On remortgage products, two-year fixed rates will be cut by up to 24bps and five-year fixed rates by up to 10bps.
Meanwhile, NatWest is launching a two-year fix at 4.49% and a five-year fix at 4.67%, marginally undercutting Santander's new rates, which came into effect today.
"It is hard to predict exactly what will happen in the mortgage market over the short term due to the ongoing fluctuating funding costs," Strutt said. "Thankfully, there are more lenders offering two-year fixes below 4.5% now and five-year fixes priced at 4.70% or slightly lower.
"The good news is that rates are reasonably priced again in general, and the anticipated pricing hikes have not happened yet."
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