Nationwide and Virgin cut mortgage rates as brokers declare home loan ‘price war’
Mortgage brokers are claiming a home loan price war is under way, after Nationwide Building Society became the latest lender to lower its rates.
From tomorrow, Britain’s biggest building society will be reducing rates on selected deals by up to 0.3 percentage points.
It means Nationwide will now be home to the lowest fixed rate on the market, with its cheapest five-year fixed deal starting at 4.18 per cent with a £1,499 fee.
Virgin Money is also cutting rates with some home buyers, remortgagers and buy-to-let investors likely to benefit from the changes.
Today’s announcements follow on from mortgage rate reductions by Barclays, HSBC, Yorkshire Building Society, Santander and Halifax last week. Mortgage brokers welcomed the news as another win for borrowers with mortgage rates heading lower and with base rate cuts on the horizon.
Jack Tutton, director at SJ Mortgages told the news agency, Newspage: ‘The momentum for rate cuts continues as Nationwide and Virgin follow several other lenders last week.
‘The price war is now well and truly on. With Nationwide reducing some of their rates by 0.3 per cent, this should push more lenders into making further cuts to remain competitive. This is yet more positive news for borrowers.’
Hannah Bashford, director at Model Financial Solutions added: ‘The battle of the rates is upon us. This can only be good news for borrowers and hopefully a tussle for the top will mean rates trickle below that magic 4 per cent barrier that everyone is so desperate for them to break. ‘If the Bank of England cuts rates in August, it will feel like game, set and match.’
For anyone moving home with a 40 per cent deposit or more, Nationwide’s 4.18 per cent will be the market leading rate from tomorrow.
It does, however, come with a hefty £1,499 product fee meaning it may not be the cheapest overall.
Santander is also offering a 4.2 per cent deal with a £999 fee and HSBC is offering a 4.22 per cent with a £649 fee.
Nationwide is also now offering the lowest two-year fix for home movers with a 40 per cent deposit or more.
Its 4.59 per cent deal is falling from 4.79 per cent and comes with a £1,499 fee.
Virgin Money has also reduced rates across a number of its fixed rate deals aimed at home buyers, homeowners and buy-to-let investors
First-time buyers also stand to benefit from Nationwide’s changes. Those buying with a 25 per cent deposit can now secure a three year fix at 4.77 per cent with a £999 fee.
Nationwide is also cutting rates on some of its remortgage deals as well as across its products aimed at existing customers looking to transfer.
Virgin Money’s rate changes have those buying with smaller deposits in mind – particularly those needing 10 per cent of the purchase price.
But it is also reducing rates aimed at people remortgaging with rates to start from 4.54 per cent.
Its buy-to-let rates are seeing the most significant cuts, however. It says certain fixed rates with a 1 per cent fee will be reduced by 0.12 per cent and will start from 4.55 per cent, while product transfer fixed rates will be cut by up to 0.2 percentage points and will be starting from 4.49 per cent.
How to find a new mortgage
Borrowers who need a mortgage because their current fixed rate deal is ending, or they are buying a home, should explore their options as soon as possible.
What if I need to remortgage?
Borrowers should compare rates, speak to a mortgage broker and be prepared to act.
Homeowners can lock in to a new deal six to nine months in advance, often with no obligation to take it.
Most mortgage deals allow fees to be added to the loan and only be charged when it is taken out. This means borrowers can secure a rate without paying expensive arrangement fees.
Keep in mind that by doing this and not clearing the fee on completion, interest will be paid on the fee amount over the entire term of the loan, so this may not be the best option for everyone.
What if I am buying a home?
Those with home purchases agreed should also aim to secure rates as soon as possible, so they know exactly what their monthly payments will be.
Buyers should avoid overstretching and be aware that house prices may fall, as higher mortgage rates limit people’s borrowing ability and buying power.
How to compare mortgage costs
The best way to compare mortgage costs and find the right deal for you is to speak to a broker.
Article sourced from https://www.thisismoney.co.uk/money/mortgageshome/article-13612559/Nationwide-Virgin-cut-mortgage-rates-brokers-declare-home-loan-price-war.html
Mc Daid Mortgages do not accept responsibility for any advice provided or opinions expressed with this article. This is for information purposes only
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