Nationwide make third cut to mortgage deals – with more lenders tipped to follow

Nationwide makes third cut to mortgage deals – with more lenders tipped to follow Act now if you are due for a renewal - most lenders let you change to a better deal later - Bookmark - CommentsGo to comments More lenders are expected to cut mortgage rates in a boost to homeowners and first-time buyers. With tension easing in the Middle East, mortgage rates have headed downwards, with Nationwide making another bout of cuts to some products – its third round of reductions this month alone. Barclays and Skipton Building Society also lowered some rates last week. Experts expect the trend to continue, but with small cuts as time goes on rather than vast, sweeping changes while uncertainty still lingers. The threat of inflation caused by rising oil prices during the height of the Middle East conflict had seen swap rates edge lower, in anticipation of the Bank of England potentially hiking interest rate. Mortgages are priced off swap rates. “With the oil price returning to pre-war levels, there is a sense of optimism in the air after a turbulent few months. When major lenders like the Nationwide cuts rates, others tend to follow,” said Omer Mehmet, managing director at Trinity Finance. In the most recent reduction, Nationwide cut mortgage rates by up to 0.25 per cent across first-time buyer, remortgage and switcher deals, with their lowest fixed rate now priced at 4.19 per cent. Skipton, meanwhile, made cuts at an average rate of 0.18 per cent, but ranging up to 0.4 per cent. Jen Lloyd, head of mortgage products at Skipton, said: “The market has continued to show resilience. With interest rates holding and a degree of improving certainty in the Middle East, this is providing some welcome respite for borrowers. “While global conditions remain changeable and affordability is still stretched for many, these latest reductions represent a positive step forward for both existing homeowners and those looking to get onto or move up the property ladder.” The building society would continue with “a cautious but supportive approach”, Ms Lloyd added, mirroring most lenders in taking those smaller steps back down with rates prices. Last week, Moneyfacts picked out a two-year fix with Yorkshire Building Society as one of the top deals on the market. Get a free fractional share worth up to £100. Capital at risk. Terms and conditions apply. ADVERTISEMENT Get a free fractional share worth up to £100. Capital at risk. Terms and conditions apply. ADVERTISEMENT Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “Yorkshire has cut a selection of fixed rate mortgages in its range this week, including a two-year fixed mortgage at 75 per cent loan-to-value for house purchase customers. Now priced at 4.44 per cent through to 30 September 2028, this deal offers borrowers a free valuation incentive and its product fee of £995 can be added to the mortgage advance, ideal for those looking to save on the upfront cost of their deal.” Ms Springall called it a “highly attractive package” overall - and other experts are serving reminders that, even with more lenders expected to cut rates in the coming days and weeks, it’s important to act early to secure a good deal if you’re due for a remortgage. Most lenders will let you secure your next product with six months left on your current deal - and if a better one comes along afterwards, you can usually still switch. Check the terms of your deals, but acting sooner rather than later is always the best approach, said David Stirling, independent financial adviser at Mint Wealth. “Nationwide’s [cuts] are part of a broader repricing across the market. Swap rates are falling in anticipation of further Bank of England cuts. Fixed rates are priced on where money is going, not where it is today, which is why lenders are moving now. “That said, waiting for the ‘perfect’ rate is a bit like waiting for a quiet day on the M25, which is theoretically possible, but nobody has ever actually seen one. If your fixed rate deal is ending soon, now is the time to act.” Join our commenting forum Join thought-provoking conversations, follow other Independent readers and see their replies Comments