Nationwide offers lowest-ever mortgage rate

Nationwide Building Society, Britain's biggest mutual, has launched its lowest-ever mortgage rate at 0.87% fixed for two years.
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Nationwide Building Society has launched its lowest-ever mortgage rate. Britain’s biggest mutual has reduced its two-year fixed rate for borrowers to 0.87 per cent, as part of a swathe of cuts across its product range.

The bad news is that, in order to access the new rate, buyers will need an eye-watering 40% deposit.

The rate on the 40 per cent deposit mortgage, which comes with a hefty £1,499 fee and is available to home movers as well as those remortgaging, had previously been 0.91 per cent.

It is currently the cheapest fixed-term, non-tracker mortgage on the market for home movers. It does face stiff competition from TSB, however. That bank’s two-year fixed rate for remortgagors comes with a 0.84 per cent interest rate and a lower £994 fee. Halifax had previously launched a 0.83 per cent rate in early August, but that rate is no longer available.

Mortgage deals are currently lasting for an average of just 21 days, so borrowers need to move quickly. Lenders have been making the most of the recent housing boom and their ability to borrow money cheaply from the Bank of England with the base rate at 0.1 per cent.

Record-low interest rates are being launched for those with 40 per cent deposits or equity in order to help banks and building societies attract low-risk borrowers.

Nationwide’s rate cuts do also benefit those with lower deposits, however. The building society has launched a competitive 2.99 per cent rate on a 5 per cent deposit mortgage with a three-year fix, though it is only available for home movers and not first-time buyers. That rate, which comes with a £999 fee, was reduced by 0.25 per cent. First-time buyers can also access a 2.99 per cent rate, but on a two-year fix and with a higher £1,499 fee.

Henry Jordan, Nationwide’s director of mortgages, said: “These latest reductions see the Society launch its lowest ever new lending mortgage rate, which will offer those looking for a new deal one of the best rates available.”

Image courtesy Pixabay.

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