Swap rate retreat prompts reductions of up to 0.19% across the lender's two-, three- and five-year products
Nationwide is cutting rates across its fixed mortgage range, effective from tomorrow, 4 August.
The reductions of up to 0.19 percentage points on two-, three- and five-year products bring the lender's lowest available rate to 4.52%.
The move follows several weeks of rate increases from major lenders through July. Industry commentators have attributed the shift to recent movements in swap rates.
Rate cuts in detail
Reductions of up to 0.19% apply across products up to 95% LTV. Among the new rates: the two-year fixed at 90% LTV with a £999 fee falls to 4.88% (down 0.10%); the three-year fixed at 60% LTV with a £999 fee to 4.69% (down 0.15%); and the two-year fixed at 95% LTV with a £999 fee to 5.25% (down 0.19%).
First-time buyers completing a mortgage with Nationwide receive £500 cashback. First-time buyers and home movers purchasing an energy-efficient property can also qualify for up to £500 cashback through Nationwide's Green Reward scheme.
Existing and new customers moving home will see reductions of up to 0.19% across products up to 95% LTV. Selected rates include: the three-year fixed at 80% LTV with a £999 fee at 4.84% (down 0.15%); the two-year fixed at 60% LTV with a £1,499 fee at 4.52% (down 0.02%); and the two-year fixed at 95% LTV with a £999 fee at 5.25% (down 0.19%).
Nationwide said existing customers moving home will continue to be offered the same or lower rates than those available to new customers.
Remortgage customers will see cuts of up to 0.13% across products up to 95% LTV. Among the revised rates: the five-year fixed at 75% LTV with a £999 fee at 4.81% (down 0.13%); the three-year fixed at 85% LTV with a £999 fee at 4.99% (down 0.10%); and the two-year fixed at 60% LTV with a £999 fee at 4.70% (down 0.07%).
Nationwide's existing customer pricing pledge remains in place, meaning switcher rates for existing customers seeking a new deal will be equal to or lower than equivalent remortgage rates.
"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," said Carlo Pileggi, head of mortgage products at Nationwide. "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."
Swap rate context
Nicholas Mendes (pictured right), mortgage technical manager at John Charcol, pointed to swap rate volatility as the key driver, noting that two-year SONIA touched 4.220% and the five-year reached 4.313% on 31 July before easing back to 4.139% and 4.227% respectively — still above early July levels when two-year swaps were closer to 3.925%.
"The explanation sits with swaps, despite the Bank of England's hold announcement last week," Mendes said. "Swaps spiked when the Middle East conflict flared up in July, then pushed higher still into month end."
Mendes added that Nationwide has a track record of repricing quickly when swaps move downward. He cautioned, however, that the partial retreat in rates should not be read as a settled market.
"For borrowers weighing up their options now, the sensible approach is to secure a rate and keep checking in, especially if you're remortgaging over the next four to six months, rather than treat this latest lender announcement as a sign that pricing has settled," he said.
Aaron Strutt (pictured right), product director at Trinity Financial, welcomed the cuts but noted they followed a period of significant increases. He observed that Nationwide's cheapest two-year fix was coming down marginally from 4.54% to 4.52%, and said the building society had clearly been working to recover ground lost in 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. "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."
For rate-conscious borrowers, Strutt suggested the Barclays 3.99% tracker currently offered the strongest value, even accounting for the possibility of a base rate increase later in the year.
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