Nationwide launches lowest ten-year fixed rate mortgage at 2.84%

20th January 2015

Nationwide Building Society is launching the lowest ten-year fixed rate mortgage on the market at 2.84% tomorrow.

The deal, fixed until 2025, is available to borrowers with a 40% deposit at a rate of 2.94% for new borrowers and 2.84% for existing mortgage customers.

It has a £999 product fee, reduced to £499 for first-time buyers. Remortgage customers benefit from free standard valuation and the choice between free standard legal work or £250 cashback.

Andrew Montlake, director at Coreco, the broker, says: “It seems only a short while ago that everyone was waxing lyrical about the fact that five-year fixed rates were falling below the 3% level, but now we are seeing 10 year fixes fall to levels many thought we would never see.

“With the current rate war raging between lenders showing no signs of abating any time soon and the prospect of rate rises becoming more distant again, I do not think we have yet seen the bottom of this latest cycle of cuts.

“The main question, however, is whether or not long term fixes will finally take off at this level, given that many borrowers have previously been hesitant to commit to 10 year products. Now Nationwide have pushed the rates down further to 2.94%, with a further reduction to 2.84% for existing borrowers, those looking for security over the medium to long term now have a real choice.”

The building society is also making other reductions across its range. Five-year fixed rate deals have also been reduced by up to 0.40%, with rates starting from 2.44% for new mortgage customers.

A wide range of two and three year fixed deals have also been reduced. The two year fixed rates now start at 1.74% for new mortgage customers and both three year fixed rates and the four year fixed rate Flexclusive deals, available only to Nationwide’s main current account customers, both now start at 2.24%.

Existing mortgage customers benefit from at least an additional 0.10% discount on all new customer rates, with two year fixed rates for existing customers now starting at 1.64% – Nationwide’s lowest ever fixed rate.

Richard Napier, Nationwide’s director of mortgages and savings, said: “There has been a growing trend of customers opting for longer term fixed rates to ensure certainty of monthly mortgage payment, particularly ahead of any rise in interest rates, with the recently-introduced 10 year fixed rate mortgages proving a popular addition to the range.

“This competitive range of new fixed rate mortgage deals is likely to appeal to both first time buyers and those looking to remortgage by ensuring longer term security of mortgage payments.”

Nationwide is also reducing rates on its 95 per cent loan to value (LTV) Save to Buy fixed rates have by up to 0.35%, with rates starting at 4.44% for prospective buyers with a 5% deposit.

With Nationwide’s Save to Buy initiative, savings accounts can be opened with a minimum of £50, with customers saving at least £50 per month for six months or more.  If the customer goes on to take a Save to Buy mortgage, depending on how much they save, there is also a cashback reward of up to £1,000.

Nationwide also continues to offer its Loyalty Rate Mortgages initiative, which compares the Society’s mortgage rates for existing customers with those of its top six high street competitors and guarantees to offer the lowest comparative rate for those looking for a new deal.

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