Nationwide is the latest lender to launch a new mortgage rate best buy product, and we could see a 3.5% five-year fix by the time we get to Christmas, as lenders continue to slash rates.
Nationwide yesterday announced the introduction of a five-year fix at 3.78% for new and existing customers moving home.
The rate is only available to borrowers with at least a 40% deposit who need a home loan of at least £300,000 and also carries a £1,499 fee.
The deal undercuts HSBC’s 3.8% five-year fix that previously led the market.
HSBC’s rate is only available to customers with a premium account with the bank, although it also has a 4.83% offer without the same requirements.
Nationwide has also reduced its rates for homeowners remortgaging and is offering 3.94% for a five-year fix. It is the first sub 4% remortgage rate since February.
The latest round of cuts follows reductions made earlier in the week by a number of high-profile lenders, including Barclays, Halifax, TSB and Virgin Money.
Mark Harris, of brokerage SPF Private Clients, said: “Until now, lenders have been targeting home movers with sub 4pc rates, but competition among the ‘big six’ lenders is driving rates lower and now those remortgaging are also seeing the benefit.
“With markets expecting further rate cuts, we could see a 3.5% five-year fix by the time we get to Christmas, which will be a massive psychological boost for the market.”
The recent increase in sub-4% deals from some of the biggest lenders on the high street has provided a welcome boost for the mortgage market and is likely to attract more would-be buyers in the coming weeks; good news for estate agents.
Tony Castle, managing director at PFG Mortgages, commented: “It’s incredible to see rates at 3.78%. Many thought we may not see this until 2025, but they have been proven wrong. This is a huge boost for homeowners and home movers alike. These rate reductions are sprinkling some serious stardust onto the housing market.”
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