NATIONWIDE has cut its switcher mortgage rates for existing customers by up to 0.12% – but “borrowers should not sleepwalk into a product transfer just because it is easy”.
The new rates, across two, five and 10-year fixed rate products, will be effective from today and switcher rates, which are for existing Nationwide customers coming to the end of their current mortgage deal, start from 4.56%.
The new rates include a two-year fixed rate at 60% LTV with a £999 fee is 4.56%, reduced by 0.03%, a five-year fixed rate at 60% LTV with a £999 fee is 4.59%, reduced by 0.10%, and five-year fixed rate at 75% LTV with no fee is 4.83%, reduced by 0.12%.
Carlo Pileggi, Nationwide’s Head of Mortgage Products, said: “We’re making these latest rate cuts to support existing customers as they come to the end of their current deal.
“Together with our pricing pledge – ensuring switcher rates will be the same or lower than the remortgage equivalents – it reflects our commitment to helping our customers secure the best possible rate on a new mortgage deal.”
But brokers hit back at the announcement, saying it was a tiny saving for Nationwide mortgage customers – they are still advised to compare the wider market.
Try not to spend that £60 a year all at once
Darryl Dhoffer, Founder at Bedford-based The Mortgage Geezer, criticised Nationwide’s announcement.
He added: “Nationwide is tearing up the track with a jaw dropping rate cut of up to… 0.12 percentage points. If you qualify for that 60% LTV two-year fix, you can bask in a monolithic 0.03% reduction. On a £200,000 mortgage, this staggering corporate reduction saves you a fiver a month.
“Try not to spend that £60 a year all at once. Nationwide claims this ‘reflects our commitment’. Nothing says ‘we’ve got your back’ quite like shaving pennies off a 4.56% rate while keeping a £999 fee firmly in place. It’s like tipping a waiter a pound and expecting a standing ovation.”
Manooch Suree, Director at Uxbridge-based Zinga Financial Services, said borrowers should not leave their new deals to the last minute.
He added: “Nationwide’s latest cuts are another sign that competition in the mortgage market remains firmly focused on existing borrowers. While the reductions are modest, they will be welcomed by homeowners coming off higher fixed rates and looking to secure certainty over the next two or five years.
“The key message for borrowers is not to leave it until the last minute, reviewing options early with all the options available in the market can make a meaningful difference to monthly payments and overall borrowing costs.”
Let’s not pretend 0.12% changes the whole affordability picture
Nouran Moustafa, Practice Principal & IFA at Roxton Wealth, said these reductions won’t make much of a difference.
She added: “Nationwide cutting switcher rates is welcome, but let’s not pretend 0.12% changes the whole affordability picture. For many borrowers coming off older fixed rates, the problem is not whether their new rate starts with a 4 instead of a 5; it is that their mortgage payment may still be hundreds of pounds higher than what they were used to. The interesting part is the switcher focus.
“Existing borrowers need speed, certainty and less friction. If a client is staying with their current lender, there is often no full remortgage process, no valuation drama and less paperwork, which can be a lifeline when people are already anxious about payment shock. But borrowers should not sleepwalk into a product transfer just because it is easy.
“They still need to compare the wider market, check fees, term, overpayment flexibility and whether their circumstances have changed. Small cuts matter, but strategy matters more. The cheapest quick option is not always the best long-term mortgage decision.”
Harry Goodliffe, Director at Winchester-based HTG Mortgages, said these changes are miniscule.
He added: “Every little helps, but let’s keep this in perspective. A reduction of a few hundredths of a percentage isn’t going to dramatically change someone’s monthly payment.
“What’s more important is that we’re seeing another major lender move rates down, adding to the sense that the market is becoming more competitive. Borrowers need sustained cuts, not just a one-off headline.”
Borrowers should not sleepwalk into a product transfer just because it is easy
Jack Tutton, Director at Fareham-based SJ Mortgages, said the pricing pledge is significant.
He added: “Whilst rate reductions are always welcome regardless of the amount, the pricing pledge is the more important takeaway from Nationwide’s head of mortgage products.
“In a world where some lenders hide their existing customer products making it difficult to compare or charge significantly higher rates to existing customers, this will be an important factor for mortgage holders to consider when reviewing their mortgage and what lender is most appropriate for their circumstances.”
Samuel Mather-Holgate, Managing Director & IFA at Swindon-based Mather and Murray Financial, said loyalty is not always valuable.
He added: “Nationwide’s cuts are welcome, but this is mortgage relief by inches, not miles. A reduction of up to 0.12 percentage points will help at the margins, especially for existing borrowers rolling off older deals, but it will not transform the household finances of anyone facing a much higher rate than they became used to.
“The real significance is competitive pressure. Big lenders know borrowers are watching every basis point, and existing customers expect to be treated fairly rather than used as captive renewal business. Anyone nearing the end of a deal should not simply accept the first offer on the screen.
“Check the fee, the rate, the total cost over the fixed period and what rivals are offering. In this market, loyalty is only valuable when the numbers prove it.”
Photo by Icons8 Team on Unsplash.
