Nationwide slashes mortgage rates for first time buyers

Published by Tom Wilson on 07 January 2016.
Last updated on 07 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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