Nationwide Building Society has launched a mortgage under 4%, signalling that the market is becoming friendlier to mortgage applicants.
The rate stands at 3.99% for a 5-year fix with a 40% deposit and a £1,499 fee.
There is also a no-fee version at 4.25%.
Simon Gammon, managing partner at Knight Frank Finance, said: “The arrival of sub 4% mortgages will have a sizeable impact on sentiment, provided other lenders follow. Borrowers generally feel much more comfortable when rates begin with a three, so conditions are primed for a busy autumn.
“That said, it is surprising that lenders are still cutting rates when the latest set of inflation figures failed to show much progress on some of the key points of concern among Bank of England policymakers. It really is a demonstration of how competitive the market is. Margins are already wafer thin, but the lenders are eager to make up for lost ground after months of disappointing levels of activity.
“We can expect rates to fall quite quickly when we do get a meaningful change in the inflation narrative.”
For first-time buyers, Nationwide is offering a 5-year fixed rate of 4.55% with a 15% deposit and a £999 fee.
