Nationwide cuts mortgage rates for first-time buyers
A major lender has reduced mortgage rates for first-time buyers, despite the Bank of England deciding to keep interest rates the same at 4.5%. Starting today, Nationwide is offering lower rates that can be below 5% for borrowers with a 5% deposit. The reductions apply to various two, three, and five-year fixed-rate deals. For example, a two-year fix at 95% loan-to-value (LTV) has dropped from 5.56% to 5.30%. Home movers looking at Nationwide mortgages have also seen similar rate cuts. Existing Nationwide customers who are relocating can benefit as well. A two-year fix at a 90% LTV is now available at 4.99%, down from higher rates. Nationwide’s changes reflect confidence in future interest rates, with expectations of upcoming cuts from the Bank of England. Mortgage experts believe that more lenders might follow Nationwide’s lead, thanks to steady swap rates. This gives lenders room to offer competitive fixed-rate deals ahead of the spring housing market, which is usually busy. For those seeking mortgage deals, having a larger deposit can lead to lower rates. Remortgaging with a better LTV or improving one’s credit score may also provide opportunities for better rates. Comparing mortgage options through tools or brokers can help find the best deals, although some may charge fees. Recently, Barclays and Nationwide surprised the market with sub-4% mortgage offers for select clients. Barclays continues to offer a competitive 3.96% rate for its Green Home mortgage with specific eligibility requirements. Looking ahead, inflation rates are predicted to peak at 3.7% this summer, affecting the Bank of England's approach to interest rates. While mortgage rates rely on swap rates, market expectations hint at several rate cuts later this year. Currently, the average two-year fixed mortgage rate stands at 5.33%, while the five-year average is at 5.22%. Understanding the types of mortgages is important, as fixed-rate mortgages maintain the same interest over a set term, while variable rates can fluctuate with market conditions.