Nationwide confirms key change for customers ‘from Tuesday’

Nationwide has slashed mortgage rates by up to 0.28% following Iran and the US reaching a peace agreement, in what has been described as “welcome news for borrowers” – though experts warn that “people should not assume rates are now definitely heading in one direction”. The cuts will take effect across its fixed mortgage range tomorrow, Tuesday, June 16, with the lowest available rate standing at 4.29%.

The revised rates include:

– Reductions of up to 0.20% across two, three and five-year fixed rate products up to 95% Loan-to-Value (LTV) for first-time buyers

– Reductions of up to 0.28% across two, three, five and ten-year fixed rate products up to 90% LTV for remortgages

– Reductions of up to 0.17% across two, three, five and ten-year fixed rate products up to 95% LTV for existing and new customers moving home

Carlo Pileggi, Nationwide’s head of mortgage products, said: “We’re delighted to be cutting rates again as we look to put Nationwide at the forefront of borrowers’ minds. These changes will support first-time buyers and home movers, as well as provide competitive options for those looking to remortgage. Following the rate cuts last week to our switcher range for existing customers, this underlines our role as an all-round lender focused on supporting borrowers across the housing market.”

Rohit Kohli, director of Romsey-based The Mortgage Stop, said the news was positive.

He added: “Nationwide’s cut is welcome news for borrowers, especially after mortgage pricing moved upwards sharply following the outbreak of the conflict. I would be careful about linking this reduction too directly to the Iran and US news of a peace deal.

“A lender of Nationwide’s size will usually have planned this repricing several days ago, based on Swap rates, funding costs and competitor activity. That said, the market reaction to the proposed peace deal matters.

“If oil and energy prices keep falling, that eases some inflation pressure and could improve the medium-term rate outlook. Other lenders may follow, but borrowers should not assume we are heading straight back to the rates seen at the start of the year.”

Chunky cuts

Omer Mehmet, managing director of Welling-based Trinity Finance, said the market had started the week positively.

He added: “These are fairly chunky rate cuts from a major lender and will create optimism about more reductions to come in the days and weeks ahead following the end of the war in the Middle East. It’s still early days but this is a positive start to the week.”

Shaun Sturgess, director of Swansea-based Sturgess Mortgage Solutions, warned against complacency.

He added: “It’s likely these rate cuts were planned before the news about the war ending last night. Reductions like this will be welcomed by borrowers but equally people should not assume rates are now definitely heading in one direction as we have seen how quickly things can turn in the past.”

Justin Moy, managing director of Chelmsford-based EHF Mortgages, said lenders were passing on cheaper deals.

He added: “Good news from Nationwide that will inevitably help push rates with many of the other high street lenders. This rate cut would have been approved at the end of last week, so not a direct response to the Middle East improvement, but Swap rates are looking more palatable, which will give the lenders the green light to pass on cheaper deals.”

David Stirling, Independent Financial Adviser at Belfast-based Mint Wealth, said the direction of travel was positive.

He added: “After a year that’s felt like a financial rollercoaster held together with geopolitical duct tape, here’s some actual good news: Nationwide is reducing selected fixed mortgage rates by up to 0.28% from tomorrow. The somewhat unlikely catalyst is an interesting cocktail of a US-Iran peace deal inching closer to reality, which has calmed oil markets, dragged gilt yields lower and given lenders just enough breathing room to stop quietly sweating and start cutting.

“Nationwide aren’t alone as NatWest, Halifax, Barclays and others have already trimmed rates this month. This direction of travel is good, but with the Bank of England meeting Thursday and inflation still above target, this isn’t the moment to assume rates can only go one way. If you’re thinking about buying or remortgaging, now’s a good time to have a conversation.”

Darryl Dhoffer, founder of Bedford-based The Mortgage Geezer, urged borrowers to lock in deals quickly.

He added: “Make hay while the sun shines – or while Donald Trump stays off the socials. Sonia Swap Rates have reacted positively this morning with the so-called peace agreement in the Middle East set for this Friday.

“All about trends and as yet, one social tweet as we have seen in the past, does not constitute consistent downward interest rate market trends – but good to see Nationwide finally coming to the table with lower rates.”