Sub-4% swap rates trigger a fresh price war among major lenders
Nationwide led other lenders in slashing rates, reducing pricing across its fixed rate mortgage range and cutting selected tracker products for both new and existing borrowers.
From today, rates on two-, three-, five- and 10-year fixed products will fall by as much as 19 basis points (bps), while selected two-year tracker rates will be cut by up to 12bps. The changes apply across first-time buyer, home mover, remortgage and switcher ranges.
Remortgage customers will see the largest reduction on a fee-free two-year fixed rate at 90% loan-to-value, which falls by 19bps to 5.20%.
Existing Nationwide borrowers switching deal will see their biggest saving on a fee-free two-year fixed rate at 80% LTV, down by 16bps to 4.98%. Nationwide said its pricing pledge for existing customers remains in place, meaning switcher rates will continue to match or undercut equivalent remortgage products.
First-time buyers taking a five-year fixed rate at 60% LTV with a £999 fee will see the sharpest cut, falling by 19bps to 4.37%. First-time buyers completing a mortgage with Nationwide continue to receive £500 cashback, with a further £500 available to first-time buyers and home movers who purchase an energy-efficient property under the lender's Green Reward scheme.
Borrowers moving home, whether new or existing Nationwide customers, will see reductions of up to 15bps, with the largest cut applied to a three-year fixed rate at 95% LTV with a £999 fee, down to 5.16%. Nationwide said existing customers moving home continue to be offered rates matching or below those available to new borrowers on equivalent products.
Nationwide's latest repricing comes as several other lenders trim rates ahead of the new week. Virgin Money has cut its two-year fixed remortgage rate by up to 16bps, while BM Solutions and Halifax are both reducing rates by up to 15bps on their core ranges from today. Halifax is also applying a further 20bps discount for Lloyds Premier customers.
“The big story in the swap market is that one-to-five-year SONIA swaps are now all sitting below 4%, with two-year at 3.913% and five-year at 3.999%, down from 4.159% and 4.176% respectively in early June,” said Nicholas Mendes (pictured right), mortgage technical manager at London broker John Charcol. “That's a hugely positive signal for the market. Sub-4% funding across the short and medium end gives lenders genuine room to compete for business, and today's cuts of 0.10% to 0.19% show exactly that playing out, with arguably a little more to come if swaps hold at these levels.
“Six lenders repricing inside 24 hours tells you nobody wants to be left looking expensive going into the second half of the year, particularly with remortgage volumes picking up. Coventry is the outlier, nudging some residential fixed rates up while cutting BTL, which shows it's not a uniform race to the bottom.
“For borrowers, the message is simple. Trying to time the absolute bottom of the market is impossible, and waiting for rates to fall further can easily cost more than it saves. Anyone remortgaging should secure a rate now, as most lenders will let you switch to a lower deal if pricing improves before completion, so you get the protection without losing the upside. For buyers, if you see a property, you like and it's affordable, don't delay. Holding off in the hope of a slightly cheaper rate risks missing out on the right home altogether, and that disappointment tends to outlast any small saving on the rate.”
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
