Mortgage price war erupts as Nationwide unveils its lowest ever rates
The mortgage price war has been ramped up further as Britain's biggest building society has unveiled some of its lowest ever rates.
Nationwide Building Society said that from Thursday, it is snipping rates on selected two and five-year fixed and two-year tracker rate mortgage products by up to 0.1%.
For those with a 10% deposit, often first-time buyers, Nationwide's two-year fixed rates have been reduced to 2.19% with a £999 fee and 2.59% with no fee, the lowest rates in this range ever offered by Nationwide.
A five-year fixed-rate product for borrowers with a 40% deposit will now start at 1.84% with a £999 fee and 2.04% with no fee - also a historic low for the society.
Henry Jordan, Nationwide's Director of Mortgages, said: "We are making further reductions to selected rates across our fixed and tracker rate ranges, with a number of Nationwide mortgage rates reaching historic lows."
Last week, Yorkshire Building Society launched a deal with the lowest rate experts had ever seen. The two-year 0.89% standard variable rate (SVR) mortgage is available to borrowers with a 35% deposit.
Financial information website Moneyfacts said the 0.89% mortgage rate is the lowest on its records, which go back to 1988.
Borrowers wanting to take out the 0.89% deal will also need to stump up a product fee of £1,495, or alternatively they could opt to pay a lower fee of £995 and have a higher mortgage rate of 1.05%.
Nationwide's announcement came as Santander made rate reductions of up to 0.3% to its mortgage products on offer as well as launching some new deals on Wednesday.
Santander's revamped range includes a five-year fixed deal at 2.14% with a £999 product fee for borrowers with a 20% deposit, with £250 cashback.
Miguel Sard, managing director of mortgages at Santander UK said earlier this week: "The mortgage market continues to be very competitive."
Rachel Springall, a finance expert at Moneyfacts, said Nationwide appears to be supporting borrowers with a limited deposit or equity.
She said: "It's encouraging to see Nationwide dropping rates on mortgage deals, particularly for those borrowers who may have a limited deposit to get onto the property ladder."