Nationwide has announced the launch of a four-year fixed rate mortgage deal at 2.89 per cent for existing Flex current account holders.
The new product is available for homeowners with at least 40 per cent equity. The new product comes with a fee of £900 and includes a free valuation.
Meanwhile, Nationwide says its existing range of four year Flexclusive fixed rate products without product fees are being reduced by 0.10 per cent and a new 60 per cent LTV tier at 3.19 per cent is being introduced.
Tracie Pearce, head of group mortgages, products and pricing, said: “For Nationwide, market-leading headline rates aren’t just about attracting new customers. We want to ensure that those who have the deepest relationships with the Society benefit most, and are rewarded for their loyalty.”
The new product follows hot on the heels of sub three per cent five-year fixed rate mortgage deals from NatWest, Santander and HSBC and on the same day as the Bank of England’s Funding for Lending (FLS) scheme is announced.
The new product from Nationwide is slightly different to the other products in that it offers a fixed rate over four years rather than five.
It seems clear that these new cheaper linger-term fixed rate mortgages are on offer as a result of the FLS but as yet there are no rate cuts on mortgage products designed for those with less equity or first-time buyers with a low deposit.
Ben Thompson, MD of Legal & General Mortgages believes that the price war is good for homeowners with more than 40 per cent of equity but it raises question marks over the impact of the FLS for the wider mortgage market.
He said: “This brings into sharp focus again the fact that this price war for now is all about the lowest risk mortgage borrowers. No lender can be criticised for taking this approach however the overall housing market needs to be freed up at the bottom to really get going again.”
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