Lower sub-4% rates offered as market competition intensifies
Major lenders Nationwide and HSBC have announced reductions in their mortgage rates again – both offering new sub-4% rates.
Nationwide is cutting rates by up to 0.26% across its fixed rate mortgage products, including two-, three-, five-, and 10-year terms. The reductions will be available to new and existing customers, with rates now starting from 3.78% for a five-year fixed rate mortgage at 60% loan-to-value (LTV) with a £1,499 fee. The new rates take effect tomorrow, August 22.
For home movers, Nationwide’s five-year fixed rate at 75% LTV with no fee will also drop by 0.26% to 4.09%. First-time buyers will see reductions of up to 0.25%, with a two-year fixed rate at 60% LTV with no fee reduced to 4.74%.
In addition, Nationwide is lowering rates for remortgages and for existing customers switching products by up to 0.25%.
In a similar development, HSBC has announced reductions of up to 0.24% across its mortgage range, targeting first-time buyers, home movers, and buy-to-let borrowers.
The bank’s new rates include a five-year fixed rate mortgage at 60% LTV, now offered at 3.84% with a £999 fee, a decrease of 0.11%. For home movers, a five-year fixed rate at 75% LTV with a £999 fee has been reduced by 0.23% to 4.04%.
HSBC’s rate cuts extend to higher LTV products, with the bank emphasising support for customers with smaller deposits.
“A sub-4% five-year fix is great news for those coming up to remortgage and is the first one that has been available since the end of February,” commented Mark Harris, chief executive of mortgage broker SPF Private Clients. “Until now, lenders have been targeting home movers with sub-4% rates but competition among the ‘big six’ lenders is driving rates lower, and now those remortgaging are also seeing the benefit.
“This product has a slightly higher than normal fee – £1,499 versus £999 – so it’s important to make sure you do the numbers to ensure it’s the best deal for you. A whole-of-market broker will help you assess whether a product with a higher rate and a lower fee may work out better.
“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.”
Specialist lenders also implement rate cuts
Meanwhile, other mortgage lenders have announced rate cuts, providing more competitive options for borrowers and brokers alike.
The Mortgage Works (TMW), the buy-to-let arm of Nationwide Building Society, reduced selected buy-to-let rates by up to 0.10%. New rates start at 3.49%, with notable reductions including a two-year fixed rate at 4.64% for up to 75% LTV, and a five-year fixed rate at 4.29% for the same LTV band.
Fintech lender MPowered Mortgages also trimmed rates by up to 0.17% across its product range. The most significant reductions are in its three-year remortgage products, with the 70% and 75% LTV options dropping by 0.17%, now starting at 4.25% with a £999 fee.
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Digital mortgage lender Perenna followed suit by cutting rates on its residential offerings, including a 38-basis point reduction in its remortgage range, now starting at 5.71% for 60% LTV. Additionally, Perenna introduced a new 10-year fixed minimum term for both purchase and remortgage, enhancing long-term security and flexibility for borrowers.
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