Mortgage brokers have hailed a ‘watershed moment’ as Nationwide became the first lender in months to release a sub-5% home loan deal on a two and five-year fix.
Nationwide has today unveiled a five-year fixed rate at 4.64% with a £999 fee for up to 60% loan-to-value (LTV).
It is hoped that this will boost property demand as the cost of borrowing will be slightly cheaper for homebuyers.
Speaking to the Newspage agency, Lewis Shaw, of Shaw Financial Services, said: “These latest rates from Nationwide are a watershed moment.
"Two-year fixed rates dipping below the 5% mark, something we've not seen for months, should give people hope that things are heading in the right direction.
“It should also mean we see other lenders follow suit, leading to a much more competitive market over the next few months when transaction levels drop naturally leading up to Christmas.
“We're not out of the woods yet, and yes, there is still more pain to come for many households about to renew their mortgage over the coming months. However, this may be at least a glimmer of light in what is still a very long tunnel.
Mortgage broker Jamie Thompson added: “Where Nationwide go many usually follow. I don’t think it will be long before we see most of the high street at sub 5% for low loan-to-value mortgages. I wouldn’t be surprised if we start to see higher loan-to-value mortgage rates dip below 5% in the near future, too.
“Remember, many lenders will let you switch to lower rates before your mortgage completes but after a mortgage offer has been issued. This can allow you to search for a bargain now while the market is quiet and vendors are flexible and still benefit from potentially lower rates in a few months' time when there could be a lot more buyers to complete with.