The move follows intensifying competition amongst lenders
Millions of Nationwide customers have received welcome news today. Experts have descibed the change as ‘noteworthy’.
The reductions, which came into effect on Wednesday, June 10, apply to Nationwide’s ‘switcher’ mortgages, available to existing customers transitioning onto a new fixed-rate deal. The building society has slashed rates by up to 0.12 percentage points for existing borrowers whose current mortgage deal is nearing expiry, with new rates beginning from 4.56%.
Among the most notable changes, Nationwide’s five-year fixed-rate mortgage at 75% loan-to-value (LTV) with no fee has been trimmed by 0.12 percentage points to 4.83%. Its five-year fixed-rate deal at 60% LTV with a £999 fee has been reduced by 0.10 percentage points to 4.59%.
Its two-year fixed-rate mortgage at 60% LTV with a £999 fee has dropped by 0.03 percentage points to 4.56%. The move follows intensifying competition amongst lenders as homeowners seek respite from high mortgage costs.
Carlo Pileggi, Nationwide’s Head of Mortgage Products, said: “We’re making these latest rate cuts to support existing customers as they come to the end of their current deal. Together with our pricing pledge – ensuring switcher rates will be the same or lower than the remortgage equivalents – this reflects our commitment to helping our customers secure the best possible rate on a new mortgage deal.”
Nationwide confirmed its switcher rates are exclusively available to existing customers, backed by its commitment that borrowers renewing with the building society will receive rates equal to, or lower than, comparable remortgage deals. Jack Tutton, Director at Fareham-based SJ Mortgages, told Newspage that the pricing pledge is particularly significant.
He said: “Whilst rate reductions are always welcome regardless of the amount, the pricing pledge is the more important takeaway from Nationwide’s head of mortgage products.
“In a world where some lenders hide their existing customer products making it difficult to compare or charge significantly higher rates to existing customers, this will be an important factor for mortgage holders to consider when reviewing their mortgage and what lender is most appropriate for their circumstances.”
Samuel Mather-Holgate, Managing Director & IFA at Swindon-based Mather and Murray Financial, warned that loyalty doesn’t always pay off. He added: “Nationwide’s cuts are welcome, but this is mortgage relief by inches, not miles. A reduction of up to 0.12 percentage points will help at the margins, especially for existing borrowers rolling off older deals, but it will not transform the household finances of anyone facing a much higher rate than they became used to.
“The real significance is competitive pressure. Big lenders know borrowers are watching every basis point, and existing customers expect to be treated fairly rather than used as captive renewal business. Anyone nearing the end of a deal should not simply accept the first offer on the screen.
“Check the fee, the rate, the total cost over the fixed period and what rivals are offering. In this market, loyalty is only valuable when the numbers prove it.”
