Nationwide has become the latest mortgage lending institution to reduce the rates on its fixed rate mortgage products.
The Nationwide is the UK’s third largest lender and it is reducing the cost of all its five year fixed rate deals by 0.1% and its two year tracker mortgages by 0.15%. Contractor mortgage seekers can now get a five year 70% LTV fix from Nationwide for 3.79%, although there is also a £900 fee to pay.
Fixed mortgage rates are currently at record lows, but experts believe they will not get much cheaper and have urged borrowers to snap up a cheap home loan while they still can.
Nationwide’s head of mortgages, Martyn Dawson, said a five year fix can be the ideal solution for home buyers who like some certainty about their mortgage repayments. Our decision to reduce these rates further is excellent news for those people, he added.
We’ve seen a flurry of lenders cutting their rates in recent weeks; including Lloyds TSB, Halifax and NatWest. Last week, the Chelsea Building Society joined the price cutting war and launched a five year fixed rate product at just 3.39%.
According to Moneyfacts, the average five year fix now costs 5.02%, the lowest rate since before the economic crisis. And the CML says that around 62% of first time buyers and those remortgaging chose a fix in May.
The reduction in the cost of fixed rate deals is being driven by a decrease in swap rates, which such deals are partially based upon, as it is thought the Bank of England’s MPC will delay raising the base interest rate until sometime next year.
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