In a significant move within the UK mortgage sector, Nationwide Building Society has reduced its mortgage rates substantially, while competitor Santander raises theirs in response to market conditions.
Nationwide Building Society has made notable moves in the UK’s competitive mortgage market by announcing significant rate reductions, positioning itself strongly against rivals. From Wednesday onwards, Nationwide is offering new mortgage rates, with some cuts reaching up to 0.81 percentage points, marking their move as one of the largest in recent times. Among the new offerings includes a two-year fixed-rate mortgage at 4.56% for first-time buyers with a 15% deposit, a rate below 4% for the first time in eight months.
The cuts from Nationwide surfaced amid a broader trend of mortgage rate reductions by lenders. However, some lenders, such as Santander, have conversely adjusted their rates upwards. Santander, part of the UK’s “big six” lenders, raised certain mortgage interest rates between 0.05 and 0.2 percentage points, citing the influence of a 4% increase in December’s inflation and subsequent money market swap rates volatility.
Experts in the industry have noted Nationwide’s timing and strategy. Mortgage and protection specialist Katy Eatenton and analysts like Justin Moy of EHF Mortgages and Charles Breen of Montgomery Financial acknowledged Nationwide’s competitive edge in the market with these reductions. Meanwhile, a Santander spokesperson justified their rate increases by clarifying that the bank continually revises rates in response to various market conditions.
The contrasting actions of Nationwide and Santander illustrate the current dynamism within the UK mortgage market. While Nationwide’s rate cuts may provide opportunities for both existing and prospective borrowers, Santander’s increases indicate how inflation can impact lending rates. Industry specialists, including Riz Malik of R3 mortgages, have advised that despite the favourable cuts, rates might not remain low for an extended period due to market fluctuations and global economic uncertainties.
