The sub-4 per cent mortgage has made a comeback as Nationwide announces a fresh range of rate reductions.
Nationwide has announced a raft of rate reductions of up to 0.23 per cent across two, three, and five-year fixed rate products up to 95 per cent LTV.
This included the five-year fixed rate at 60 per cent LTV with a £1,499 fee being reduced to 3.99 per cent.
While Emma Jones, Whenthebanksaysno.co.uk managing director, acknowledged this will only be available to borrowers with bigger deposits or more equity, she said this is a “big moment” and shows that “momentum is picking up” in the mortgage market.
“Lenders seem to be pricing in a base rate cut in August or, if not, not long after. If that happens, then we could see rates continue to drop to the delight of borrowers around the UK,” she added.
Similar positivity was displayed by Coreco managing director, Andrew Montlake, who pointed out that the announcement is a “significant and positive development” for both homeowners looking at remortgaging and prospective buyers alike.
“The move signals a more favourable borrowing environment and provides a much-needed boost to market confidence and consumer sentiment,” he explained.
“For many who have been sitting on their hands before acting in the mortgage market, this could well be the watershed moment that spurs them into action.”
Additionally, Self-Employed Mortgage Hub director, Graham Cox, stated that Nationwide’s reduction signalled that “the worst of the mortgage market woes are well and truly behind us”.
He explained that, after several months of steadily increasing rates, the last month has seen “consistent” mortgage rate cuts from all the major lenders.
“With a base rate cut likely in August or September, we could see a big jump in property transactions in the coming months,” he added.
However, Orchard Financial Advisers managing director, Ben Perks, cautioned that, while it’s positive to “crash through the 4 per cent barrier”, the industry shouldn’t “get too comfortable”.
“We saw some late-3 per cent rates back in January and then it all went wrong,” he pointed out.
“A base rate cut in August would help us to see more sub-4 per cent rates going forward and, let’s face it, they’re much needed.”
Thanks to the Newspage community for sharing their thoughts with FTAdviser
tom.dunstan@ft.com
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