Britain’s biggest building society has slashed mortgage interest rates to as low as 3.89 per cent in a win for homeowners and prospective homebuyers.
Nationwide Building Society has reduced rates by up to 0.25 percentage points on selected fixed rate products across its first-time buyer and home mover ranges.
The new deals from the lender include two-year and five-year fixed rates at 3.89 per cent for borrowers with a 40 per cent deposit, with a £1,499 fee.
These competitive rates will be available to both existing and new Nationwide Building Society customers who are moving home.
Nationwide Building Society is slashing mortgage rates
NATIONWIDE BUILDING SOCIETY
First-time buyers will be offered a two-year fixed-rate mortgage at 4.09 per cent, also requiring a 40 per cent deposit and carrying a £1,499 fee.
The cuts were announced as both HSBC UK and First Direct revealed changes to stress rates used in their affordability calculations.
These changes could increase some people’s ability to borrow or qualify for mortgages.
Stress rates are used by lenders to check whether borrowers can still afford their mortgage if interest rates were to increase.
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Households are looking for a mortgage deal GETTYFirst direct is also applying rate reductions of up to 0.14 percentage points across more than 100 products.
HSBC UK estimated its changes could enable 20,000 more customers to get a mortgage with the bank. The move will also allow some customers to borrow larger amounts as part of a mortgage.
For first-time buyers, HSBC said the average increase in offer will be £39,000. First direct’s stress rate changes could benefit around 85 per cent of mortgage applicants.
These applicants would be able to borrow an average of £22,000 more than previously possible.
These applicants would be able to borrow an average of £22,000 more than previously possible.
Oli O’Donoghue, HSBC UK’s head of mortgages, said: “By carefully reviewing our affordability calculations, allowing more customers to meet affordability criteria and potentially access increased borrowing amounts, we are aiming to ease some of the pressure on prospective buyers.”
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The Bank of England has made multiple changes to the base rate over the years CHAT GPT Liam O’Hara, head of mortgages at first direct, was similarly positive about his bank’s changes.
“The changes will benefit the vast majority of our existing customer base when they decide to remortgage or take out a new product,” he said.
O’Hara added: “On top of this, we are pleased to be applying more reductions to our rates.”
More widely in the mortgage market, the Financial Conduct Authority is currently reviewing its expectations for mortgage lending. This is part of proposals to streamline its rules and could make it easier for more people to access home loans.
