Mortgage rates nationwide decrease despite Bank of England maintaining interest rates constant
In a move that could shake up the UK housing market, a major high-street us bank has decided to undercut Nationwide as the largest homebuilder by lowering its interest rates on selected mortgage products. While the specific us bank remains unnamed in search results, the decision comes after the U.S. Federal Reserve cut the key interest rate by 0.25 percentage points on September 17, 2025, which is likely to influence banks' lending rates. Other banks are expected to follow this trend in the coming days.
Nationwide, in response, has announced a reduction of up to 0.18 percentage points on selected two, three, and five-year fixed rate products. This move is particularly beneficial for first-time buyers and those looking to buy a new home.
For home movers with a 40 per cent deposit, this means they can secure a market-leading 3.8 per cent two-year fix with Nationwide, albeit with a £1,499 fee attached. On a £200,000 mortgage being repaid over 25 years, this reduction would equate to a monthly payment of £1,066.
For those with a 20 per cent deposit, a three-year fix with Nationwide can be had at 4.24 per cent, with a £999 fee. This works out to a monthly payment of £1,034 on the same £200,000 mortgage over 25 years.
First-time buyers with a 25 per cent deposit will also see a reduction in Nationwide's lowest two-year fix, which will now stand at 4.09 per cent, again with a £999 fee.
Despite the general trend of lenders increasing mortgage rates, the Bank of England has kept the base rate at 4 per cent, suggesting that this move by Nationwide and potential competitors could be a strategic response to the global economic climate rather than a reflection of the UK's domestic economic situation.
This latest development in the mortgage market is good news for home buyers, offering more affordable borrowing options and potentially boosting the uk's housing market.
