Nationwide Introduces Market-Leading 4.29% 5-Year Fixed Rate for Purchases up to £5 Million
Nationwide has taken the lead as the first lender to unveil a sub-4.3% fixed mortgage rate. Recent weeks have witnessed a series of rate cuts among lenders, each contending to present the most competitive offers and inject vitality into the housing market following a year of elevated rates and diminished net lending.
In their latest product update effective from December 8th, Nationwide has implemented reductions of up to 0.31% across their two, three, and five-year fixed-rate products. This adjustment positions Nationwide as the provider of the most competitive 5-year fix currently available. For property purchases up to £5 million, Nationwide is offering an attractive 4.29% fixed interest rate for a five-year term, for those with a 40% deposit, accompanied by a £999 fee. Marking a nearly 1% reduction below the Bank of England Base Rate.
For those considering remortgaging, Nationwide extends competitive options with two and five-year fixed rates below 4.9% and 4.7%, respectively.
First-time buyers also stand to benefit from Nationwide's offerings, with considerations for lending up to 5.5 times their salary. Opting for a five or ten-year fixed rate is possible under this scheme, with eligibility criteria which requires you to be employed (not available to self-employed individuals) and a minimum income requirement of £30,000 for sole income or £50,000 for joint income. Borrowing with a 5% deposit is possible, although the maximum mortgage amount will be lower compared to a higher deposit scenario. For instance, with a 5% deposit, the maximum loan is £500,000, while a 15% deposit allows for a maximum loan of £1,500,000.
Representative example for purchases:
For a property purchase of £1.2 million with a capital and interest mortgage of £720,000 payable over 25 years. The mortgage will initially be on a fixed rate of 4.29% for 5 years, then the Nationwide variable rate, currently 7.99%, for the remaining 20 years. There would be 60 payments of £3,918.40 followed by 240 payments of £5,270.68. The total amount repaid would be £1,500,132.20 made up of the initial loan amount (£720,000), the interest payable (£779,053.20) and the product fee (£999), final repayment charge (£65), completion fee (£15). The overall cost for comparison is 6.6% APRC representative.
Rate War Unfolds:
Nationwide is not alone in its rate reduction strategy, as a rate war has erupted in recent weeks. Major lenders, including Barclays, Halifax, Santander, and NatWest, have all slashed rates within their fixed-rate ranges. This competitive landscape reflects a combination of market expectations and lenders striving to meet annual targets in the current subdued market conditions, where fewer individuals are involved in property transactions.
Fixed rates typically reflect what is happening with SONIA Swap rates in financial markets, serving as benchmarks. Presently, the five-year SONIA Swap rate is below 4%, representing a low in recent months.
If you are contemplating a property purchase or a remortgage, our mortgage consultants are ready to provide tailored advice. Contact us at 01628 564631 to explore the most suitable options for your needs.
Your mortgage is secured on your property. Your home may be repossessed if you do not keep up repayments on your mortgage.
The information contained within was correct as of 11th December 2023 but is subject to change.
Source: Nationwide for Intermediaries
