The rates have been cut by up to 0.5% and a non-refundable £99 booking fee has been introduced. All are based on borrowers finding a 40% deposit.
Two-year fixed rates start at 3.98%; three-year fixed rate mortgages start at 4.58%; and two-year trackers are available from 3.08%. The products have a reservation fee of £896 in addition to the booking fee of £99. For those remortgaging, two-year fixed rates start at 3.98%; three-year fixed rates start at 4.78%; and two-year trackers start at 3.08%. The products also have a reservation fee of £896.
Commenting, Louise Cuming head of mortgages at moneysupermarket.com, said: "Any move to cut rates should be seen as a positive step and it is good to see Nationwide raising the competitive stakes. However, the impact will be limited. Nationwide's new rates, while competitively priced aren't market leading. And the pricing restructure doesn't help alleviate the problems facing those with small deposits - the best deals are still restricted to borrowers with significant equity in their homes. Nationwide requires borrowers to have at least 40 per cent to put down in order to qualify for its lowest rates. Providers must look to offer affordable deals for all borrowers including those with smaller deposits if the mortgage market is to make a full recovery.
"It is also interesting to see Nationwide has joined a growing band of lenders charging borrowers an upfront fee in order to secure a product. Although at £99 this is not a huge cost, Nationwide obviously wants some commitment that borrowers will see the application through to completion - if borrowers have to pay upfront, they are less likely to drop out part-way through the process. Lenders currently fear that with no up front fee borrowers may be tempted to make multiple applications to 'hedge their bets'. However, an upfront fee may be in the borrower's interests too. As well as being costly for lenders if applicants drop out at the last minute, it could also be dangerous for consumers: many don't appreciate the damage multiple applications can have on their credit profiles. With a good credit history being worth its weight in gold at the moment, a small upfront fee might be of as much benefit to the consumer as it is the provider."
