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Nationwide cuts rates following BoE rate decision

ended 21. September 2023

Following hot on the heels of the Bank of England's decision to leave Bank Rate unchanged at 5.25%, the Nationwide has just announced further cuts: It said: “From tomorrow, Friday 22 September, we're reducing selected fixed rates by up to 0.31%.” 

Rates available >> here <<.

Riz Malik, director of Southend-on-Sea-based independent mortgage broker, R3 Mortgages, said: “Nationwide is the first high street lender to reprice within a couple of hours of the base rate announcement. With some sub-5% deals on offer, I expect others to come out fighting within the next 24 hours. It's now firmly game on.”

Stephen Perkins, managing director at Norwich-based Yellow Brick Mortgages, agreed that more rate cuts are now a certainty: “Dig your feet into the sand, as there is a tidal wave of rate reductions about to hit following the decision by the Bank of England to hold the base rate today, which was better than lender expectations of another increase. This will give lenders confidence we are near or at peak and therefore they will continue their rate war to win market share. This is great news for homeowners and those planning to buy and will pump some adrenaline into the heart of the property market.”

Elliott Culley, director at Hayling Island-based Switch Mortgage Finance, also welcomed the news: “More good news in the mortgage market after today's base rate decision. I think rates will continue to fall and will look even better by the start of October. It's great to see rates starting with a 4 and not just at the lowest loan-to-values.”

Samuel Bull, senior mortgage adviser at Huddersfield-based mortgage broker, JB Mortgages, agreed that more lenders are likely to follow the Nationwide's lead: “Nationwide was quick off the mark reducing its product range following the Bank of England's decision to hold the base rate at 5.25%. 5-year 'swap rates' are currently around 4.5%, which would suggest it is only a matter of time before other lenders follow suit. Let the rate battle commence.”

But Kundan Bhaduri, director of London-based property developer and portfolio landlord, The Kushman Group, cautioned that more needs to be done to support landlords: “This is an excellent starting point. The problem, though, is that unless these rates percolate down to buy-to-let mortgages, we will still be squabbling about high rents as landlords will be selling up at scale. Banks owe it to tenants to enable landlords to continue to offer homes to people who have been hit hard by the mini-Budget.”

Meanwhile, Simon Bridgland, director at Canterbury-based broker Release Freedom, was worried about service levels being hit due to pent-up demand hitting lenders hard: "I hope that lenders are preparing themselves for a possible tsunami of applications if this wave grows over the coming weeks. It wasn't many months ago that we had weeks of delays for applications being processed. The demand is always there, but with the higher rates mortgage holders have been up against of late, it has simply created a pent-up demand waiting to be unleashed. Lenders have the money in their pockets waiting to lend, so if the rates are right then borrowers will be starting to form an orderly queue."

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15 responses from the Newspage community

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Platinum
Riz Malik
Director at R3 Mortgages
Nationwide is the first high street lender to reprice within a couple of hours of the base rate announcement. With some sub-5% deals on offer, I expect others to come out fighting within the next 24 hours. It's now firmly game on.
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Platinum
Justin Moy
Managing Director at EHF Mortgages
Ideal timing from Nationwide, launching up to 0.31% off their fixed rates just two hours after the base rate hold was announced. Sub-5% deals on longer-term deals, below 5.5% for 2-year deals, and the domino effect of further market rate cuts will be with us very soon. It's a great day for mortgage borrowers.
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Platinum
Stephen Perkins
Managing Director at Yellow Brick Mortgages
Dig your feet into the sand, as there is a tidal wave of rate reductions about to hit following the decision by the Bank of England to hold the base rate today, which was better than lender expectations of another increase. This will give lenders confidence we are near or at peak and therefore they will continue their rate war to win market share. This is great news for homeowners and those planning to buy and will pump some adrenaline into the heart of the property market.
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Platinum
Craig Fish
Director at Lodestone Mortgages & Protection
This is by far the clearest indication yet that the rate war is now well and truly on. To come out so soon after the base rate was held is an indication of the hunger to do some business. Expect more to follow in the coming days and weeks, and with 5-year swaps below 5 % and 2-year swaps on the cusp of hitting 5%, the next question to ask is how long before we see most rates starting with a 4?
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Platinum
Simon Bridgland
Broker/ Director at Release Freedom
The start of some proper rate reductions is certainly a most welcome sight. However, I hope that lenders are preparing themselves for a possible tsunami of applications if this wave grows over the coming weeks. It wasn't many months ago that we had weeks of delays for applications being processed. The demand is always there, but with the higher rates mortgage holders have been up against of late, it has simply created a pent-up demand waiting to be unleashed. Lenders have the money in their pockets waiting to lend, so if the rates are right then borrowers will be starting to form an orderly queue.
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Premium
Kundan Bhaduri
Property Developer and Portfolio Landlord at The Kushman Group
This is an excellent starting point. The problem, though, is unless these rates percolate down to buy-to-let mortgages, we will still be squabbling about high rents as landlords will be selling up at scale. Banks owe it to the tenants to enable landlords to continue to offer homes to tenants who have been hit hard by the Kamikwasi mini-Budget.
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Premium
Samuel Bull
Senior Mortgage Broker at JB Mortgages
Nationwide was quick off the mark reducing its product range following the Banks of England's decision to hold the base rate at 5.25%. 5-year 'swap rates' are currently around 4.5%, which would suggest it is only a matter of time before other lenders follow suit. Let the rate battle war commence.
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Premium
Elliott Culley
Director at Switch Mortgage Finance
More good news in the mortgage market after today's base rate decision. I think rates will continue to fall and will look even better by the start of October. It's great to see rates starting with a 4 and not just for the lowest loan-to-values.
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Premium
Lewis Shaw
Owner and Mortgage Expert at Shaw Financial Services
In less than two hours, lenders have reacted to the news that the Bank of England has held the base rate and begun another round of fixed rate reductions, starting with Nationwide, the second largest residential lender in the UK. With a few fixed rates now starting with a four rather than the dreaded five or six percent, this will be a welcome relief to many prospective mortgage holders, especially those already in the process of buying who may be able to pick a lower rate before completing their purchase. It's positive to see that off the back of the base rate announcement today, and with gilts and swaps falling by seventy basis points in the past month, we're starting to see movement. It just shows we only need a glimmer of light at the end of the tunnel, and the green shoots begin to emerge.
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Aaron Strutt
Product and Communications Director at Trinity Financial
Lenders are lowering their rates as they look to provide more competitively priced fixes and trackers. The base rate hikes have been putting real pressure on the mortgage and property markets to the point where there is nowhere near as much activity as we would normally see at this time of the year. There are now a few lenders offering either sub-5% five or seven-year fixes and some reasonable tracker rates without exit fees. Mortgage rates need to be closer to four per cent to bring more confidence back to the market. There certainly isn’t a full-on rate war at the moment, but rates are coming down as the price of funding fixed rates falls.
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Peter Stamford
Mortgage Expert at Stamford Home Finance
Looks like Nationwide fired the starting gun on slashing rates, and the rest are bound to want to catch them up soon. It's the kind of market shake-up that has everyone from first-time buyers to landlords perking up. Rate cuts this quick could be the ignition the stagnant property market needs. Here's to more good news as we head into October.
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Rita Kohli
Managing Director at The Mortgage Stop
Well done Nationwide with this announcement, just two hours after the base rate was held. Businesses are looking for certainty and stability and with that comes a desire to lend from lenders, which could offer an environment for economic recovery. We will soon start seeing 5-year fixed rates starting with a 4 regularly and shorter-term rates, particularly trackers without exit fees, are likely to become more popular.
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Charles Breen
Founder at Montgomery Financial
This marks another positive step forward, now that the Bank of England has at last had the courage to pause. There will be a collective sigh of relief across the country, and perhaps we have now turned the corner. We anticipate this trend continuing, which could be a new chapter for UK mortgage lending and could reignite the property market. It's likely that other high street lenders will also take a cue from this reduction and follow suit. Chances are we'll see much more of this in the coming weeks, and not before time, as consumers are worrying, especially with over half a million people set to move onto new rates before Christmas.
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Gary Boakes
Director at Verve Financial
Up to 0.31% is potentially a fantastic saving for new borrowers and existing customers. Nationwide's timing is impeccable as always, and follows on from the great news about the Bank of England base rate today. Rate reductions are going to be a term that I'm not going to be sick of over the next few days and weeks as all lenders take advantage of reduced swap rates and what seems like renewed confidence in the market.
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Steven Hargreaves
Mortgage and Protection Adviser at The Mortgage Co
The reduction in Nationwide's interest rates was expected based on other lenders dropping their rates this week. Nevertheless, it is good news and much needed. It will mitigate increases to existing buyers whose rates are coming to an end, and make mortgages for first-time buyers cheaper. Hopefully, the need for new business will force lenders to cut their margins and reduce rates even further.