Nationwide Triggers Mortgage Rate War with Cuts to 3.50%
In a significant boost for the UK housing market, Nationwide Building Society has announced sweeping cuts to its fixed mortgage rates, with deals starting from just 3.50%. The changes, which come into effect on Thursday, 14th January 2026, are being seen by industry experts as a pivotal moment that could reshape competition among lenders.
Details of the New Mortgage Deals
The headline offer is a two-year fixed rate mortgage at 3.50% for both new and existing customers looking to move home. To secure this highly competitive rate, homeowners will need a substantial 40% deposit and will pay a product fee of £1,499. This specific rate represents a reduction of 0.08 percentage points.
For first-time buyers, Nationwide is introducing a two-year fixed rate at 3.75%, which has been cut by 0.17 percentage points. This deal requires a more accessible 15% deposit and carries a lower fee of £999. As an added incentive, first-time buyers will also receive £500 cashback upon completion of their mortgage.
The building society is implementing reductions of up to 0.20 percentage points across its range of two, three, and five-year fixed-rate products for home movers. Cuts of up to 0.17 percentage points are being applied to deals for first-time buyers.
Expert Reaction: A 'Line-in-the-Sand' Moment
The move has been warmly welcomed by mortgage analysts. Nicholas Mendes, mortgage technical manager at John Charcol, stated that Nationwide's latest reductions "feel like a real line-in-the-sand moment". He believes the 3.50% rate "will turn heads" and signals building competition, following similar sharp pricing from other major lenders like Lloyds and HSBC.
Rachel Springall, a finance expert at Moneyfactscompare.co.uk, called it "fantastic news for borrowers", noting that Nationwide now offers "one of the lowest fixed rate deals across the entire mortgage market". She highlighted that swap rates are near 30-day lows, fuelling hope for further cuts and creating a "very positive" start to 2026 for borrowers.
Both experts caution that the lowest rate isn't always the best option, advising borrowers to consider fees and incentives. Mendes also suggested that while competition is fierce, "any further falls from here are more likely to be marginal than dramatic", recommending that buyers secure a deal now with the help of a broker who can manage the process and potentially switch to a better rate before completion.
Carlo Pileggi, Nationwide’s head of mortgage products, said: "Rates starting at 3.50% for new and existing home movers will come as great news to those looking to move home in 2026." With expectations high for a booming property market this year, these cuts are set to ease affordability constraints and provide a major stimulus for buyers at all levels.
