Britain’s third largest mortgage lender has launched a 5 year fixed rate deal at what brokers say is an “incredible” 3.78 percent.
The figure is the cheapest home loan of its type for more than two years and is expected to light a fire under the increasingly competitive mortgage market.
The move by Nationwide trumps a series of reductions launched by rivals HSBC, Barclays and TSB earlier this week.
Brokers welcomed the news and suggested further reductions are likely to follow.
Tony Castle, Managing Director at PFG Mortgages, said: “It’s incredible to see rates at 3.78 percent.
“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.”
Gabriel McKeown, Head of Macroeconomics at Sad Rabbit Investments, said: “The recent mortgage rate cuts by Nationwide signal a pivotal shift in the UK mortgage market, driven by broader economic trends as the Bank of England hints at further interest rate cuts to manage inflation.
“The reintroduction of sub-4 percent fixed-rate mortgages will begin to offer financial relief as many transition from historically low rates.
“These reductions should help to drive increased affordability and market activity in the housing sector, with the potential for further reductions leading to more competitive mortgage offerings across the board.”
Andrew Montlake, Managing Director at Coreco, told Newspage: “This move from Nationwide marks a new low point in the 5-Year Fixed Rate battle and shows that the mortgage rate war is now in full flow as lenders look to end the year on a high.
“Products such as these will help convince prospective borrowers who have sat on their hands for a while to plunge into the housing market before it becomes too hot and prices inevitably begin to strengthen once more, especially in high-demand areas.”
Emma Jones, Managing Director at Whenthebanksaysno.co.uk, said: “This 5-year fixed rate is throwing the gauntlet down to the competition and is setting the property market up for a very busy end to 2024.”
Darryl Dhoffer, Mortgage Broker at The Mortgage Expert, said Nationwide’s rivals will be scrabbling to keep up with the reductions.
“It’s clear that Nationwide is the only lender that truly understands the needs of homebuyers,” he said.
Justin Moy, Managing Director at EHF Mortgages, said: “These are rates we haven’t seen for at least two years. They will give borrowers plenty of confidence to get back into the property market.”
