Mortgage wars: Nationwide, NatWest, Santander and HSBC ramp up rate reductions

Mortgage wars: Nationwide, NatWest, Santander and HSBC ramp up rate reductions
Nick Cheek
Written By:
Nick Cheek

A raft of major high street providers have slashed rates this week, as the competition to attract homeowners continues to intensify.

After a trend of sub-5% mortgage rates hit the market last week, the reductions from the UK’s biggest banks have continued at some pace.

Nationwide announced it was the first provider to introduce two-year fixes priced below that landmark figure – and the reductions haven’t stopped there.

The mutual decreased the price of a five-year fix at 60% loan to value (LTV) to 4.43% – a rate drop of 0.21%, while a two-year fixed rate at the mutual fell by 0.2% to now stand at 4.79%.

Those deals for new borrowers and home movers include a £999 fee.

For a higher ratio, the mutual is offering a five-year fix rate at 85% LTV for 4.71% – marking a 0.23% rate cut, while the longer-term 10-year fix at 60% LTV is down even further. The deal was slashed by 0.32%, meaning the price is now 4.78%.

Santander joins the sub-5% two-year fix club

Meanwhile, Santander and NatWest continued the rate-cutting spree by lowering residential, buy-to-let and existing customer switcher rates.

NatWest dropped rates for switcher products, the biggest being the no-fee deal at 60% LTV. This dropped from 5.9% to 5.4%, while the two-year fix without a fee at 75% LTV was cut by 0.37% to stand at 5.48%.

The five-year fixed rate equivalent was slashed from 5.43% to 5.17% and, with no fee involved, the deal is 5.11%.

This compares to the average two-year fixed mortgage rate priced at 5.65%, down from 5.88% a year ago, while the average five-year fix costs 5.21%, according to Rightmove’s data.

Elsewhere, Santander is offering decreased rates for residential and buy-to-let customers as part of its new business and product transfer ranges.

Residential fixes including the two-year rate up to 60% LTV with a £999 fee are down from 5.14% to 4.99%.

For a 75% LTV on a residential purchase mortgage, borrowers can enjoy a rate of 5.09% – a drop of 0.15%.

The lender is offering customers a 60% LTV five-year fixed rate on a buy-to-let mortgage or purchase mortgage for 4.89%, which has a £1,749 product fee. A 75% LTV with the equivalent term and product fee has been cut from 5.31% to 5.21% too.

HSBC looks to entice first-time buyers with fee-saver deals

HSBC also cut rates. In terms of deals for first-time buyers, a two-year fixed fee-savers up to 90% and 95% LTV are now priced at 5.69% and 6.09% respectively.

For those looking to remortgage, the two-year fixed fee-saver is available for 5.44% up to 75% LTV. The three and five-year fixed standard deals up to 75% LTV have been reduced to 4.99% and 4.84%.

A two-year fix up to 75% LTV stands at an average rate of 5.50% while a five-year equivalent is 5.12%. Looking across the whole mortgage market, the lowest rates around for those deals, according to Rightmove, are a rate of 4.93% and 4.58% respectively.