Mutual lender also backs PRA move allowing greater LTI flexibility
Nationwide Building Society will reduce interest rates by up to 20 basis points (bps) on selected two-, three- and five-year fixed mortgage products, with the changes taking effect from tomorrow, July 10.
The new pricing applies across a range of loan-to-value (LTV) tiers and includes deals for first-time buyers, remortgage customers, switchers and those seeking additional borrowing.
For first-time buyers, the lender is applying reductions of up to 11bps on fixed rates up to 90% LTV. Among the revised rates, the two-year fixed deal at 85% LTV with a £1,499 fee will be 4.13%, reduced by 6bps. The five-year fixed rate at 85% LTV with a £999 fee will fall to 4.19%, a cut of 10bps. A five-year fixed product at 90% LTV with no fee will now be priced at 4.49%, also down by 10bps.
Remortgage customers will see reductions of up to 11bps on two-, three- and five-year fixed rates up to 90% LTV. These include a two-year fixed deal at 80% LTV with a £999 fee, reduced to 4.44% (a cut of 5bps), a three-year fix at 85% LTV with no fee now at 4.60% (down 10bps), and a five-year fix at 85% LTV with a £999 fee lowered to 4.24% (down 9bps).
Switcher rates for existing Nationwide customers are also being reduced by up to 20bps on selected two-, three- and five-year fixed products up to 95% LTV. These products will now start from 3.84%.
Additional borrowing rates are being lowered by up to 0.14 percentage points across two-, three- and five-year fixed terms up to 90% LTV, with rates also starting at 3.84%.
Nationwide confirmed that existing members moving home will continue to receive equal or better rates than those available to new customers.
“We’re making further cuts across selected products from our fixed mortgage range to ensure that Nationwide continues to be front of mind for those looking to buy their first home, move to their next or who want to switch to a new deal,” said Carlo Pileggi, Nationwide’s senior manager for mortgages. “These latest cuts will particularly help first-time buyers and our existing members switching to new deals.”
Alongside the rate cuts, Nationwide has welcomed the announcement from the Prudential Regulation Authority (PRA) allowing lenders greater flexibility around loan-to-income (LTI) limits.
The revised guidance means individual lenders can now exceed the previous cap of 15% of lending at or above 4.5 times income, as long as the industry as a whole remains within the limit.
The mutual confirmed it will apply to increase its lending under the new framework, estimating it could support an additional 10,000 first-time buyers annually as a result.
“This is good news for first-time buyers, and is also a boost to the UK’s housebuilding ambition and the wider economy,” said Nationwide chief executive Debbie Crosbie (pictured right). “We have long argued that relaxing this regulatory restriction will provide confidence to both lenders and housebuilders without materially increasing risks.
“It will help people who struggle to get on the property ladder because high rents and living costs have made saving for a deposit and meeting mortgage affordability tests extremely challenging,” she added. “This is a welcome move and a strong signal that Government and regulators are working together to boost economic growth and competitiveness.”
Nationwide was the UK’s top lender to first-time buyers in 2024, and much of its higher LTI lending is done through its Helping Hand scheme. The initiative allows eligible first-time buyers to borrow up to six times their income — approximately 33% more than under standard lending terms. Since launching in 2021, Helping Hand has supported nearly 60,000 individuals onto the property ladder.
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