Nationwide slashes mortgage rates for first time buyers

Tom Wilson
7 January 2016

Nationwide has cut its rates mortgage for first time buyers, slashing up to 0.4% off its interest rates for people buying with a 5% deposit.

Rates for the 2 year 95 per cent loan to value (LTV) product are down 0.35% to 3.89% with a £999 fee or 4.29% with no fee.

Someone borrowing £190,000 with a £100,000 deposit would pay £1,034 a month with no fee, or £991 with the fee. Over the first two years, the fee carrying deal works out £33 cheaper, assuming the cost is paid up front.

Rates on longer fixed rate deals have also been cut, with three year 95% LTV fixed rates have been reduced by 0.40% to 4.39% with a £999 fee and 4.69% with no fee, while 5 year fixed rates are reduced by 0.30% to 4.69% with a £999 fee and 4.89% with no fee, respectively.

All these deals qualify for Nationwide’s £500 cashback offer for anyone arranging a first-time-buyer mortgage.

Henry Jordan, Nationwide’s head of mortgages, said: “As part of Nationwide’s range of measures to help first-time buyers on to the housing ladder, we are reducing rates for those with smaller deposits looking for competitive mortgage deals and payment security over a range of terms.”

According to the Bank of England, mortgage rates for first time buyers with a smaller deposit fell by 1.14% over the year to November to 4.13%. That takes £124 a month off monthly repayments, for someone buying a £200,000 property over 25 years.

Moneywise verdict:

While this rate cut is good news for anyone taking a mortgage with Nationwide, it’s not the best deal if you’re looking to get a fixed-rate 95% LTV mortgage.

Newcastle Building Society offers a 95% LTV two-year fixed rate deal for just 3.19%, and it has no fee. A £200,000 property would have a £920 monthly repayment, or £114 less than Nationwide.


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