- Mortgage rates falling with Bank of England expected to cut again this month
Nationwide Building Society is cutting rates across a number of its mortgage deals tomorrow.
In an ever improving mortgage market, rates continue to fall with some experts now predicting the housing market will start with a bang in 2026.
Britain’s biggest mutual will now offer rates starting from 3.58 per cent, the first time it has offered a fixed mortgage rate lower than 3.6 per cent since September 2022.
Nationwide’s changes should benefit first time buyers, home movers and households looking to remortgage and will see rates reduced by up to 0.21 percentage points across two, three and five-year products.
Nationwide’s lowest rate is a two-year fix at 3.58 per cent deal for home movers buying with at least a 40 per cent deposit.
On a £200,000 mortgage being repaid over 25 years that means paying £1,010 a month.
This is only just beaten by Santander which has a two-year fix at 3.55 per cent.
However, Nationwide’s deal comes with a hefty £1,499 fee while Santander’s is a much more reasonable £749.
Lower rates: Nationwide is now offering a wave of mortgage deals below 4 per cent
Most striking among Nationwide’s new rates is the sub-4 per cent deals available to home movers and first-time buyers with smaller deposits.
A home mover with a 25 per cent deposit can now secure a market leading two-year fix at 3.67 per cent with Nationwide while someone with a 15 per cent deposit can get 3.81 per cent, both come with a £999 fee.
First-time buyers with a 15 per cent deposit will be able to get a two-year fixed rate at 3.92 per cent with a £999 fee.
Meanwhile a first-time buyer with a 5 per cent deposit can get a 4.68 per cent deal with a £999 fee.
On a £200,000 mortgage being repaid over 25 years that will cost £1,132 a month.
Households looking to remortgage can now get a market leading 3.65 per cent two-year fix with Santander, albeit with a chunky £1,499 fee.
There is also a five-year fix at 3.79 per cent with a £999 fee. Both deals are only available to those with at least 40 per cent equity in their home.
Many mortgage brokers are confident that rates will get even better, particularly given the Bank of England is widely expected to cut interest rates later this month to 3.75 per cent.
Ben Perks, managing director at Stourbridge-based Orchard Financial Advisers, said he has high hopes for further cuts.
He added: ‘It’s never too late in the year to make a push for customers and Nationwide are nailing it here.
‘The Budget is out of the way and people are starting to lift their heads and look for deals again.
‘Hopefully, a base rate drop this month will see mortgage rates edge down a little further, then we’re off to a flyer in 2026.’
Aaron Strutt of broker Trinity Financial is equally optimistic.
‘Lenders have continued to lower their mortgage rates and keep the price war going,’ says Strutt.
‘While Nationwide’s new deals are not quite market leaders, they are not far off, which is good news for borrowers either keen to buy or remortgage soon.
‘With multiple Bank of England base rate changes expected, hopefully more rates will get closer to 3.5 per cent over the next few months. It would not surprise me to see cheaper fixes early next year.’
Buying agent Jonathan Hopper of Garrington Property Finders thinks we could even see house prices rising in the New Year, given all the uncertainty in the latter half of 2025.
He says: ‘With the Bank of England widely expected to cut interest rates again this month, the prospect of cheaper mortgages coupled with property prices that softened substantially over the past few months could propel the market into a flying start to 2026.
‘Many movers chose to put things on hold in the second half of 2025 and the shackles will come off in January.’