Nationwide announced on Monday that it is implementing further rate reductions across its fixed rate mortgage range, alongside cuts on selected tracker mortgage products. Brokers suggested that should swap rates remain favourable, more lenders would likely revisit their pricing, with one noting that “lenders are clearly back in competition mode“.

Nationwide mortgage rates will be reduced by up to 0.19% across two, three, five and ten-year fixed rate products, while rates will be cut by up to 0.12% on selected two-year tracker products. The revised rates take effect from tomorrow, Tuesday, July 7, and will apply across first-time buyer, home mover, remortgage and switcher products.

Carlo Pileggi, Nationwide’s head of mortgage products, said the lender was committed to supporting all types of borrowers. He added: “The changes we’re making tomorrow will ensure we remain competitive and continue to be front of mind for brokers and customers alike in a fast-moving mortgage market.”

Brokers welcomed the news. Shaun Sturgess, director of Swansea-based Sturgess Mortgage Solutions, said “this is a fantastic start to the week and may well set the tone for more cuts in the days and weeks ahead”.

He added: “Rates are still not what they were before the Middle East war, but they’re moving in the right direction and momentum is starting to grow.”

Tracey Dixon, owner of Cardiff-based Pure Mortgage and Protection, said: “The lowest rate doesn’t always mean the best mortgage, but more competition almost always benefits borrowers. Nationwide’s latest rate cuts are encouraging and reflect the increasingly competitive mortgage market. If swap rates remain favourable, I’d expect other lenders to review their pricing, too. The key message for borrowers is not to assume their existing lender has the best deal, but to review the whole market before making a decision.”

Rupert Collingwood, founder of property consultancy The London Broker, said: “In today’s market, any shift like this should be considered a win for the property market. We must of course hope and pray that the change of leadership within the Labour Party, the country and indeed the new face in No. 11 does not end up frightening the horses, unpicking this sort of positive movement for buyers and sellers alike.”

Harry Goodliffe, director of Winchester-based HTG Mortgages, said: “Mortgage lenders are clearly back in competition mode. Falling swap rates have given lenders more room to adjust their pricing and Nationwide is making the most of it.

“I don’t think it will be the last lender to cut rates, either. As long as swap rates remain relatively stable and there are no nasty inflation surprises, I’d expect this gradual pattern of rate reductions to continue, at least in the short term.”

Justin Moy, managing director of Chelmsford-based EHF Mortgages, added: “This is the second set of rate cuts in just over a week for Nationwide, further underlying the improvement in the Middle East conflict and improving competitiveness among high street lenders in particular. Borrowers are slowly feeling confident to buy or remortgage as rates move towards the sub-4% deals pricing from earlier this year.”

Meanwhile, Katy Eatenton, mortgage and protection specialist at Weybridge-based Eatenton Finance, said “the big lenders are now starting to make their moves. She added: “As ever, borrowers should not take anything for granted, as international events and political change domestically could change the trajectory very quickly.”

Jamie Elvin, director of London-based Strive Mortgages, said: “If swap rates remain where they are, I’d expect further reductions from other lenders over the coming days. That said, borrowers shouldn’t try to second-guess the market. A good deal today is often worth far more than waiting in the hope of shaving another 0.10% off the rate, particularly when lenders allow you to switch onto a cheaper product before completion.”

Rohit Kohli, director of Romsey-based The Mortgage Stop, said lenders were now competing hard, but conditions remained volatile: “I wouldn’t get carried away as we’re still dealing with a huge amount of geopolitical uncertainty, and that’s far from resolved.”

Nationwide and Virgin Money have joined NatWest, Santander and numerous other lenders in slashing their mortgage rates on Monday. While brokers suggested lenders appear to be gaining confidence, they also cautioned that borrowers should view this as “positive momentum rather than a guarantee cheaper deals will keep coming”.

From Tuesday, Nationwide is trimming selected fixed rates across its First Time Buyer, Home Mover, Existing Customers Moving Home and Remortgage product ranges by up to 0.36%. Virgin has also unveiled some “pretty large” rate reductions, according to one broker.

Throughout its Purchase range, two-year fixed rates will be lowered by up to 0.26%, five-year fixed rates by up to 0.24% and Shared Ownership fixed rates by up to 0.26%. On the remortgage side, two-year Virgin fixed rates will be trimmed by up to 0.24% and five-year fixed rates by up to 0.10%.

Carlo Pileggi, head of mortgage products at Nationwide, said: “We’re pleased to be cutting our mortgage rates once again, with the biggest reductions this time aimed at first-time buyers. Some of our biggest rate cuts are being made on our higher loan-to-value mortgages, which will help those with smaller deposits to take their first step onto the property ladder.”

Brokers welcomed the reductions but warned that conditions remain unpredictable.

Nouran Moustafa, practice principal and IFA at Roxton Wealth, said: “These cuts are welcome, but borrowers should not assume they are guaranteed to last. Mortgage pricing is not only about lender appetite, but is influenced by swap rates, gilt yields and expectations around inflation and the Bank of England base rate.”

“If geopolitical tensions escalate and oil prices move higher, that can quickly feed back into inflation fears and make markets more nervous. That is where cuts become fragile. I do not think borrowers should panic, but I also would not wait forever for a perfect rate.

“If a deal works for someone’s budget and circumstances, it may be sensible to secure it, particularly where the lender allows a product switch before completion if pricing improves. The market is moving in the right direction, but still sensitive to global shocks.

“Virgin, Nationwide, NatWest and Santander cutting rates is encouraging, but until inflation and geopolitical risks calm down, borrowers should see this as positive momentum rather than a guarantee cheaper deals will keep coming.”

Emma Jones, managing director at Runcorn-based Whenthebanksaysno.co.uk, concurred that the current direction of travel on rates was far from guaranteed: “Last week’s momentum has continued into this week, despite no clear evidence that the Middle East conflict is close to being resolved.

“Lenders appear more confident, but people considering buying or remortgaging should not get complacent and assume rates will continue to fall because we have seen how quickly things can turn in recent months.”

Omer Mehmet, managing director at Welling-based Trinity Finance, shared a similar view: “You sense that lenders are keen to boost their business volumes right now, as the way rates are being cut does not entirely sync with geopolitical events, which remain uncertain.”

Dariusz Karpowicz, director at Doncaster-based Albion Financial Advice, welcomed the reductions as “genuinely good news”. He continued: “Lenders are clearly competing again rather than nibbling at the edges, and borrowers on shorter fixes will feel the sharpest benefit.

“That said, Trump calling Iran’s response to his peace plan “totally unacceptable” overnight is exactly the sort of headline that rattles swap rates. Oil spikes feed inflation fears, and inflation fears feed pricing.”

Aaron Strutt, product and communications director at London-based Trinity Financial, characterised the cuts as “pretty large”, while also striking a note of caution.

He said: “It is hard to predict exactly what will happen in the mortgage market over the short term due to the ongoing fluctuating funding costs. Thankfully, there are more lenders offering two-year fixes below 4.5% now and five-year fixes priced at 4.70% or slightly lower.

“The good news is that rates are reasonably priced again in general and the anticipated pricing hikes have not happened yet. HSBC is topping the mortgage best buy tables at the moment.”

Andrew Montlake, CEO at London-based Coreco, a broker, said borrowers would welcome these cuts even though rates are still higher than they were before the war in the Middle East.

He continued: “There’s still quite some way to go before we return to the level rates were at before the conflict, but for now mortgage rates are moving in the right direction, and for some borrowers the reductions now emerging will help ease some of the pressure.”