Nationwide cuts mortgage rate again



Britain's biggest building society has announced its fifth round of mortgage rate cuts since the start of the year.

Nationwide said that it will introduce its lowest ever fixed mortgage rates following cuts of 0.15% across its range.

It is offering a 2.34% two-year fixed-rate deal with £999 to pay in fees for borrowers with a 40% deposit, which drops to 2.24% for borrowers who already have a mortgage with the mutual.

Several lenders have battled to push mortgage rates below 2% for borrowers with 40% deposits in recent days, including a two-year fix from Chelsea Building Society at 1.89%, which comes with larger fees of £1,695.

Analysts have said that borrowers need to consider whether rock bottom rate deals will work out cheaper when taking the fees involved into account.

Some borrowers may find it is more cost-effective to go for a deal with a higher rate but a smaller fee.

Nationwide is also launching a new 2.74% two-year fixed rate up to 75% LTV (loan-to-value) with £999 fee. This rate drops to 2.64% for existing borrowers.

For people with a 10% deposit, the building society is offering a new 4.24% two-year fix with £999 in fees, which existing borrowers can take out at a reduced rate of 4.14%. The building society will knock £500 off the fees for first-time buyers on its new range.

Rachel Springall, spokeswoman for financial information website Moneyfacts, said that on rate alone the Nationwide deals are higher than others on the market.

However, she said the fees are cheaper than those which come with many other low-rate deals and the "overall package" on offer will be much welcomed.

© 2013 Press Association