The Financial Times lauded Nationwide as the proud winner of their mortgage deal of the week this week, for its 2 year fixed rate now priced at 3.89%, which is available to first time buyers who borrow between £25,000 and £250,000 at 95% loan to value (LTV).
The deal comes with a £999 fee, all of which can be added to the advance of the mortgage, and includes the option of a £500 cash rebate.
This is a flexible deal which boasts the ability for borrowers to make overpayments of up to 10% of the mortgage advance a year as well as underpayments. Moneyfacts equally suggested that the release of this product would be heading straight into its ‘best buy’ list.
Nationwide’s best help to buy mortgage deals from this week marks one of the most competitive 95% LTV 2 year fixed rates currently on the market. It should be noted that the basic product is not limited solely to first time buyers, however, with existing Nationwide borrowers also able to benefit from the usual 0.1% rate discount on offer.
Much of the market has suggested that Nationwide was something of a latecomer due to its lack of participation in the mortgage guarantee scheme, however they seem to have successfully pulled an excellent rate out of the bag to make up for its absence.
As competition in the first time buyer market increases for 2016, this may not be the absolute lowest rate available, although the free valuation and £500 cashback certainly improves its overall position. For example, HSBC is currently offering a help to buy guarantee backed 2 year fix at 3.69% to 95% LTV with no fee and free valuation, while Skipton Building Society’s latest variable rate mortgage rings it at 1.49% for 2 year at 60% LTV.
One downfall for Nationwide’s latest rate, however, is that the maximum loan of £250,000 could rule out many London buyers, along with its underwriting which is deemed as ‘more picky’ than most other lenders.
Either way, Nationwide is one of many lenders improving its LTV band rate compression, with many other lenders improving their 95% LTV rate. Watch this space.