Nationwide will cut prices by up to 25 basis points across its two-, three- and five-year fixed-rate products, with its lowest rate starting at 3.99%.  

The move will make it the first major lender to return to offering sub-4% mortgages.

The mutual’s new rates, which come to market tomorrow (24 July), include:  

New customers moving home:   

• Five-year fixes at 60% loan to value, with a £1,4992 fee, will be 3.99% — down by 19bps  
• Five-year fixes at 60% LTV, with no fee, will be 4.24% — down by 23bps  

First-time buyers:   

• Five-year fixes at 85% LTV, with a £999 fee, will be 4.55% — down by 24bps  
• Two-year fixes at 85% LTV, with a £999 fee, will be 4.95% — down by 19bps  

Remortgages:  

• Five-year fixes at 75% LTV, with a £999 fee, will be 4.43% — down by 17bps  

The lender adds that it will reduce selected two-, three- and five-year switcher rates up to 95% LTV by up to 25bps, with rates starting from 4.24%.   

It adds: “These latest changes also continue Nationwide’s existing mortgage customer pricing pledge, meaning that all switcher product rates will be the same or lower than the remortgage equivalents.”  

The mutual will also cut rates for existing customers moving home by up to 23bps on selected two-, three- and five-year fixed rate products up to 95% LTV, while additional borrowing rates are being reduced by up to 25bps on two-, three- and five-year fixed products up to 90% LTV.   

Finally, the firm will lift the rates by up to 15bps on selected two-year tracker products.  

Sub-4% benchmark

John Charcol mortgage technical manager Nicholas Mendes says: “Nationwide is the first lender to finally breach the 4% benchmark following recent weeks of downward repricing.   

“This is fantastic news for borrowers and signifies a significant change in the mortgage landscape after recent months of increased rates.  

“This rate is for purchases only. Those remortgaging will need to wait a bit longer before we see rates below 4% as well.  

Mendes points out: “We will likely see the likes of HSBC look to reprice again to ensure they remain ahead of the pack, potentially resulting in another quick reprice from them.  

“Lenders have been busy competitively repricing against each other over the last fortnight, with purchase rates significantly lower than remortgage rates.   

“Purchase rates are highly competitive compared to market pricing. Expect the biggest future reductions to be in remortgage rates, as they still have room to decrease, and any significant reductions are expected in this area.”  

Nationwide director of home Henry Jordan adds: “These latest rate cuts and the reintroduction of a sub-4% product further reinforce our position as one of the most competitive lenders in the market.   

“We’ve made rate reductions across our fixed rate mortgage range because, as the country’s largest mutual, we want to maintain our support for all types of borrowers through attractively priced products, whether it be home movers, FTBs or those looking to remortgage or switch their deal.”