Nationwide cuts mortgage charges as least expensive deal breaks 3.5% barrier
- The mutual will lower rates by up to 0.2% from tomorrow for home buyers
Nationwide is cutting its mortgage rates for first-time buyers and home movers.
Its is making cuts of up to 0.20 percentage points for both new and existing customers, and the new rates include some market best-buys.
From tomorrow, Nationwide’s lowest two-year fixed rate will be 3.5 per cent for home movers buying with at least a 40 per cent deposit, though the deal does come with a hefty £1,499 fee.
On a £200,000 mortgage being repaid over 25 years that would mean paying £1,002 a month.
While Lloyds Bank does offer a marginally lower 3.47 per cent two-year fix, that deal is exclusively for its Club Lloyds banking customers.
The next lowest deal is offered by Santander, which is offering a two-year fix at 3.55 per cent. It also comes with a much lower £749 fee, which could make it a cheaper deal overall.
Lower rates: Nationwide is now offering a mortgage deal at 3.5%
Nationwide has made its latest cuts following similar moves by HSBC, NatWest, Halifax and Barclays.
‘Nationwide’s latest cuts feel like a real line-in-the-sand moment, and a benchmark other lender will be watching closely,’ says Nicholas Mendes of mortgage broker John Charcol.
‘A 3.5 per cent two-year fixed for home movers is a strong headline rate and one that will turn heads.’
On top of two-year fixes, Britain’s biggest mutual is also lowering rates across its three and five-year fixed rate products.
From tomorrow Nationwide’s lowest five-year fix will fall to 3.7 per cent with a £1,499 fee. This beats NatWest at 3.75 per cent with a £1,495 fee and first direct at 3.75 per cent with a £495 fee.
Nationwide will also be lowering rates for first-time buyers by up to 0.17 percentage points.
Standout deals include a two-year fixed rate with a £999 fee for those buying with a 15 per cent deposit at 3.75 per cent.
On a £200,000 mortgage being repaid over 25 years that would mean paying £1,029 a month.
There is also a five-year fixed rate with a £999 fee at 4.22 per cent for those buying with a 10 per cent deposit.
On a £200,000 mortgage being repaid over 25 years that would mean paying £1,080 a month.
While Nationwide’s fees are higher, first-time buyers will receive £500 cashback when they complete their mortgage.
Those moving home can also benefit from cashback of up to £500 if they purchase an energy-efficient property through Nationwide’s Green Reward scheme.
Will mortgage rates fall further?
Mortgage brokers expect rates to continue their downward trend in 2026, especially if the Bank of England continues to cut interest rates.
Aaron Strutt of broker Trinity Financial, said: ‘We expected to start this year with the lenders cutting their rates and making them more attractive to borrowers and that’s exactly what is happening.
‘It is shaping up to be a positive 2026 in terms of price reductions. There is no doubt the mortgage lenders are open for business.’
Shaun Sturgess, director at Swansea-based Sturgess Mortgage Solutions says that cheaper rates are boosting the housing market in his area.
He says: ‘In South Wales, where value for money is still a big draw, even small rate cuts improve affordability and confidence.
‘I’m already seeing more first-time buyers re-engage, more chains forming and more realistic conversations around offers.
‘Lower rates don’t automatically mean higher prices, but they do mean more people can act, so activity will pick up.
‘If other lenders follow, we could see a steady, healthier market through spring.’
