In a significant move for homebuyers and those looking to remortgage, Nationwide has announced a cut to its mortgage rates, making it the most competitive lender in the market. Effective Wednesday, May 7, 2025, the building society has slashed rates by up to 0.3 percentage points across a variety of mortgage products. This latest adjustment brings Nationwide's lowest mortgage rate down to 3.84%, which is available to both new and existing customers looking to move to a new home.
For the first time since September 2024, Nationwide is also offering sub-4% rates for first-time buyers. The lowest first-time buyer rate is set at 3.94% for a two-year fixed-rate product at 60% loan-to-value (LTV) with a £1,499 fee. Additionally, there’s an option for a rate of 3.99% on the same product but with a lower £999 fee. This move is part of Nationwide's ongoing commitment to provide competitive rates amid a rapidly changing mortgage landscape.
Carlo Pileggi, Nationwide’s Senior Manager for Mortgages, expressed satisfaction with the cuts, stating, "We’re pleased to be able to make our third rate cut in three weeks as we strive to remain one of the most competitive lenders in the market. This latest round of changes includes us offering sub-four percent rates for first-time buyers, as well as reducing rates across our Helping Hand mortgages, which enable eligible first-time buyers to borrow up to six times their income up to 95% loan-to-value."
Nationwide's new rates also include reductions for existing and new customers moving home, with cuts of up to 0.25% across two, three, five, and ten-year fixed-rate products, as well as two-year tracker products up to 95% LTV. First-time buyers can benefit from reductions of up to 0.30% across various fixed-rate and tracker products. Existing customers nearing the end of their current mortgage deal will see reductions of up to 0.20% across two and ten-year fixed-rate products.
Other lenders are also responding to the competitive market environment. MPowered Mortgages has reduced its two, three, and five-year fixed rates by up to 0.17 percentage points, while Lender Gen H has cut its rates for the fourth consecutive week. Halifax has announced it will reduce rates by up to 0.18 percentage points, and TSB and Virgin Money are lowering deals by up to 0.2 percentage points.
Experts suggest that this price war among lenders is fueled by expectations of a cut to the Bank of England's base rate, which is anticipated to drop from 4.5% to 4.25% on Thursday, May 8, 2025. Aaron Strutt of Trinity Financial remarked, "These rates are going to top the best buy tables, which is great news for borrowers especially if they are buying a home. It is fair to say that the lenders are having a price war at the moment and they are trying to issue more mortgages. It has been surprising to see the rates drop so much."
Nick Mendes, mortgage technical manager at John Charcol brokers, echoed this sentiment, noting that "Nationwide really are holding back no punches with their recent mortgage pricing, reacting quickly to every competitor punch with significant effect." He added that with HSBC repricing twice last week, further movements from high street lenders are expected in the near future.
As prospective homebuyers and those looking to remortgage navigate these new rates, the current market conditions appear favorable. Ken James, director at Contractor Mortgage Services, stated, "The current flurry of cuts have started to re-ignite the market and business is certainly starting to pick up momentum. The potential for another base rate cut this week can only add more fuel to this fire, and long may it burn."
For those considering their options, it’s essential to weigh the benefits of these new rates against the fees associated with them. For instance, while Nationwide's current rates are competitive, they come with a relatively large fee, which may affect overall affordability for some borrowers. On a £200,000 mortgage being repaid over 25 years, a rate of 3.84% with a £1,499 fee translates to monthly payments of approximately £1,038.
With this competitive landscape, borrowers are encouraged to act swiftly. Ranald Mitchell, Director at Charwin Mortgages, advised, "Nationwide haven't just trimmed rates; they’ve taken a sledgehammer to them, with cuts of up to 0.3%. It’s a clear sign that the mortgage market is swinging back in favor of borrowers as lenders fight for attention. But for those still stalling, now’s the time to act. These deals won’t hang around forever, and rates can just as easily rise as fall."
As mortgage rates continue to fluctuate, borrowers are left to ponder whether to lock in a deal now or wait for potentially better offers in the future. The trend indicates that rates may continue to decline, especially with the anticipated Bank of England base rate cut on the horizon. However, the uncertainty of future rate movements means that each borrower must carefully consider their individual circumstances before making a decision.
In summary, Nationwide's recent cuts to mortgage rates mark a significant shift in the lending landscape, providing new opportunities for homebuyers and those looking to remortgage. With competitive rates and a variety of products available, borrowers are encouraged to explore their options and act promptly to secure the best deals available.
