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Nationwide unveils 3.78% mortgage rate

Nationwide Building Society has launched a mortgage rate at 3.78% for a 60% LTV 5-year fixed rate – currently the lowest on the market.

The catch is it comes with a £1,499 fee, it’s only eligible for existing customers moving home, while borrowers need a loan of at least £300,000 to qualify.

A rate of 3.81% from HSBC was previously the lowest available, while this week Halifax, TSB and Virgin Money have also made rate cuts.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Until now, lenders have been targeting home movers with sub-4 per cent rates but competition among the ‘big six’ lenders is driving rates lower and now those remortgaging are also seeing the benefit.

“This product has a slightly higher than normal fee – £1,499 versus £999 – so it’s important to make sure you do the numbers to ensure it’s the best deal for you. A whole-of-market broker will help you assess whether a product with a higher rate and a lower fee may work out better.

“With markets expecting further rate cuts, we could see a 3.5% five-year fix by the time we get to Christmas, which will be a massive psychological boost for the market.”

A roundup of Nationwide’s new rates:

New customers moving home: reductions of up to 0.26% across two, three, five and ten-year fixed rate products up to 95% LTV, including:

  • Five-year fixed rate at 60% LTV with a £1,499 fee is 3.78% (reduced by 0.05%)
  • Five-year fixed rate at 60% LTV with a £999 fee is 3.83% (reduced by 0.05%)
  • Five-year fixed rate at 75% LTV with no fee is 4.09% (reduced by 0.26%)
  • Two-year fixed rate at 60% LTV with a £999 fee is 4.15% (reduced by 0.20%)

Existing customers moving home: reductions of up to 0.26% across two, three, five and ten-year fixed rate products up to 95% LTV, including:

  • Five-year fixed rate at 60% LTV with a £1,499 fee is 3.78% (reduced by 0.05%)
  • Five-year fixed rate at 60% LTV with a £999 fee is 3.83% (reduced by 0.05%)
  • Five-year fixed rate at 75% LTV with no fee is 4.09% (reduced by 0.26%)
  • Two-year fixed rate at 60% LTV with a £999 fee is 4.15% (reduced by 0.20%)

First-time buyers: reductions of up to 0.25% across two, three, five and ten-year fixed rate products up to 95% LTV, including:

  • Five-year fixed rate at 60% LTV with a £1,499 fee1 is 3.99% (reduced by 0.15%)
  • Five-year fixed rate at 90% LTV with a £999 fee is 4.64% (reduced by 0.16%)
  • Two-year fixed rate at 60% LTV with no fee is 4.74% (reduced by 0.25%)

Remortgage: reductions of up to 0.25% across two, three, five and ten-year fixed rate products up to 90% LTV, including:

  • Five-year fixed rate at 60% LTV with a £999 fee is 3.99% (reduced by 0.21%)
  • Five-year fixed rate at 85% LTV with a £999 fee is 4.64% (reduced by 0.20%)
  • Three-year fixed rate at 75% LTV with no fee is 4.65% (reduced by 0.25%)

Switcher: Nationwide is also reducing selected two, three and five-year switcher rates up to 95% LTV by up to 0.25% with rates starting from 3.94%.

Henry Jordan, Nationwide’s director of home, said: “We’re making cuts across the majority of our fixed rate mortgage range to support all buyer types across the housing market.”

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