Nationwide Building Society has once again made waves in the mortgage market with its second round of rate cuts in as many weeks. The move comes in response to the evolving landscape of swap rates, which underpin the pricing of fixed mortgage rate deals. As of September 1st, Nationwide is reducing selected fixed and tracker rate deals for both new and existing customers by up to 0.15 percentage points. Here's a breakdown of what you need to know about these latest developments.
New Deals for New and Existing Customers
Nationwide's latest offerings cater to a diverse range of borrowers. For those looking to remortgage, the society is unveiling a five-year fixed rate at 5.4%, accompanied by a £999 fee, ideal for those with a 60% Loan To Value (LTV) ratio. If you prefer a shorter commitment, there's a two-year equivalent deal priced at 5.9% on offer. Additionally, Nationwide is rolling out a two-year tracker mortgage with an attractive starting rate of 5.39%.
For existing Nationwide customers who are planning to move homes, there are enticing options available as well. A five-year fixed rate mortgage at 5.19% (75% LTV) with a £999 fee is accessible, as is a fee-free two-year fixed rate at 6.04% (60% LTV). Customers with a higher LTV ratio can consider a five-year fixed rate at 5.65% with the same £999 fee.
Why the Rate Cuts?
These rate cuts are a direct response to changes in swap rates. Swap rates represent the interest rates at which banks lend to one another and significantly influence the pricing of fixed mortgage rate deals. As swap rates have shifted, Nationwide is passing the benefits on to its customers by reducing mortgage rates.=
Competitive Market Trends
Nationwide's rate cuts are not happening in isolation. Other mortgage lenders are adjusting their lending criteria to stay competitive in a market experiencing contraction in mortgage approvals.
Accord Mortgages, the specialist lending arm of Yorkshire Building Society, has expanded its applicant criteria to include individuals on zero-hours contracts and those with annuity income. HSBC has also joined the race by increasing its maximum mortgage term from 35 to 40 years.
Chris Ridge, Mortgage Broker My Financial Pro, noted, "We have seen some lenders change their criteria in an effort to accommodate additional business, including the sorts of income they will accept and the maximum age the applicant can take over the mortgage."=
However, it's important to mention that Accord's criteria adjustments bring it in line with other major lenders such as Lloyds Banking Group, Virgin, NatWest, Barclays, Santander, TSB, and Coventry Building Society. These institutions already consider zero-hours contract income under specific conditions and exclusions.
In Conclusion
Nationwide Building Society's second round of rate cuts in just two weeks reflects its commitment to offering competitive mortgage deals to both new and existing customers. As the mortgage market continues to evolve, borrowers can expect more lenders to adjust their criteria and rates to remain competitive. If you're in the market for a mortgage or considering a remortgage, now may be an excellent time to explore the available options and potentially benefit from these favourable rate adjustments. Stay tuned for more updates on the dynamic world of mortgages.