NATIONWIDE is cutting mortgage rates by up to 0.2%, taking them to the “symbolic” milestone of 3.5%, the lender announced today, with brokers celebrating the move as “a massive statement” — though cautioning that borrowers need to factor in fees and not just headline rates.
The building society is cutting rates across its fixed rate mortgage range for first-time buyers, and those looking to move home, with the new rates effective from Thursday.
The latest changes, which follow slight rate increases by Santander yesterday, will see rates reduced by up to 0.2% across two, three and five-year fixed rate products with Nationwide’s lowest rate now standing at 3.50%.
However, the two-year fixed rate of 3.5% is a product with a hefty £1,499 fee and is only available up to 60% Loan to Value (LTV).
First-time buyers also receive £500 cashback when they complete their mortgage with Nationwide.
Carlo Pileggi, Nationwide’s Head of Mortgage Products, said: “Our first set of rate cuts this year will particularly support first-time buyers onto the property ladder as well as those looking to move to their next home.
“Rates starting at 3.50% for new and existing home movers will come as great news to those looking to move home in 2026.”
Massive statement
Darryl Dhoffer, Founder at Bedford-based The Mortgage Geezer, is celebrating the milestone.
He said: “Nationwide just fired their starting gun for the 2026 property market. The UK’s biggest building society has slashed rates by up to 0.2%, unveiling a headline-grabbing 3.50% 2-year fixed deal for homemovers up to 60% loan-to-value with a £1,499 fee. This is a massive statement.
“With their last major change back in early December, this aggressive move signals that the “wait and see” period is over. Breaking the 3.5% barrier proves lenders are hungry for volume and willing to squeeze margins to get it.
“It’s fantastic news for borrowers with equity and will likely trigger a domino effect across the Big Six. If you’ve been holding off on moving, the mortgage wars are officially back on.”
Rates war
Andrew Montlake, CEO at London-based Coreco, said borrowers will benefit from what is now a mortgage rate war.
He continued: “The fee may be high but the feel-good factor of rates hitting 3.5% will have a powerful effect on borrower sentiment.
“It has been a relatively quiet start to 2026 but now lenders are showing their hands and borrowers will be the ones that stand to benefit. Rates are moving in the right direction again.”
Feel-good factor
Shaun Sturgess, Director at Swansea-based Sturgess Mortgage Solutions, advised people to judge mortgage products not just on rates but also their fees.
He added: “Nationwide trimming fixed rates by up to 0.2% is a strong signal that lenders are starting to compete harder again. It’s a good move and a positive sign for the market, but the headline rates come with very steep fees, which means they won’t be suitable or accessible for a lot of borrowers.
“They look great on paper, but they have to be judged on total cost, not just the rate. In South Wales, where value for money is still a big draw, even small rate cuts improve affordability and confidence. I’m already seeing more first-time buyers re-engage, more chains forming and more realistic conversations around offers.
“Lower rates don’t automatically mean higher prices, but they do mean more people can act, so activity will pick up. If other lenders follow, we could see a steady, healthier market through spring rather than a sudden boom.
“The key point is that while not everyone can access these headline deals, seeing rates continue to come down is a good thing.”
Boost the mortgage market needed
Katy Eatenton, Mortgage & Protection Specialist at St Albans-based Lifetime Wealth Management, said the direction rates are headed is down.
She continued: “The symbolic 3.5% mortgage rate has finally landed, although it does come with a hefty fee and is available only up to 60% loan-to-value.
“But this does show the direction rates are headed, which is down. When a lender like Nationwide makes a move, others tend to follow.”
Samuel Mather-Holgate, Managing Director & IFA at Swindon-based Mather and Murray Financial, said he expects more announcements from other lenders will soon be on their way.
He added: “This is the boost the mortgage market needed. Nationwide’s move will be noted by other major lenders so expect more announcements in the days ahead.”
Dariusz Karpowicz, Director at Doncaster-based Albion Financial Advice, said competition among lenders is a positive development.
He continued: “This is a good and anticipated move from one of the main mortgage lenders in the UK. Economic volatility and geopolitical troubles continue, but against the odds lenders are reducing rates. What this shows is the direction of travel, and that is downward.
“More competition among lenders means better options filtering through, which should bring more first-time buyers back into the conversation and get chains moving again through spring. Keep them coming.”
Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, said it will give “fresh impetus” to borrowers.
He added: “Significant move by Nationwide this afternoon with rates now as low as 3.50% for those buying a property (with a £1,499 fee and up to 60% LTV), and rates are sub-4% for those with just a 10% deposit.
“Lenders continue to offer better rates to movers rather than to those looking to remortgage, in a bid to give the home-buying market some extra incentive. Let’s see if this works, but a good price cut by Nationwide will give a fresh impetus to some borrowers”
