The UK’s largest building society is dropping its cheapest mortgage rate to an eight-month low and significantly under the Bank of England’s base interest rate.
From Wednesday, Nationwide will offer new remortgaging customers a 3.84% rate on a five-year fixed deal.
Existing mortgage holders can get the low rate on additional borrowing and switcher deals, also on five-year offers.
New members and first-time buyers can get a slightly higher five-year fixed rate of 3.85%.
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As well as being below the Bank of England’s 5.25% base rate, such an offer is also below the current average five-year mortgage rate, which stood at 5.2% on Tuesday, according to financial information company Moneyfacts.
Henry Jordan, director of home at Nationwide Building Society, said: “These latest changes mean we are now offering sub-4% rates for the first time in eight months.”
But another lender, Santander, is increasing rates on some of its mortgage products.
A number of standard residential fixed rates will rise by up to 0.2% for purchase and remortgage clients, it said.
A Santander spokesman said: “Santander continually reviews its rates based on a number of factors, such as wider market conditions including swap rates.
“We offer a range of competitive mortgage deals with five-year deals starting from 3.99% and two-year deals starting from 4.25%.”
Mortgage rates had in the summer risen to above 6% for typical fixed deals but have dropped in the last four months as the falling pace of inflation led markets…
