Nationwide and Virgin cut mortgage rates as brokers declare home loan 'price war'

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Mortgage brokers are claiming a home loan price war is under way, after Nationwide Building Society became the latest lender to lower its rates.

From tomorrow, Britain's biggest building society will be reducing rates on selected deals by up to 0.3 percentage points.

It means Nationwide will now be home to the lowest fixed rate on the market, with its cheapest five-year fixed deal starting at 4.18 per cent with a £1,499 fee.

Virgin Money is also cutting rates with some home buyers, remortgagers and buy-to-let investors likely to benefit from the changes.

Mortgage cuts: Nationwide is latest lender to announce it will be repricing mortgages

Today's announcements follow on from mortgage rate reductions by Barclays, HSBC, Yorkshire Building Society, Santander and Halifax last week.

Mortgage brokers welcomed the news as another win for borrowers with mortgage rates heading lower and with base rate cuts on the horizon.

Jack Tutton, director at SJ Mortgages told the news agency, Newspage: 'The momentum for rate cuts continues as Nationwide and Virgin follow several other lenders last week. 

'The price war is now well and truly on. With Nationwide reducing some of their rates by 0.3 per cent, this should push more lenders into making further cuts to remain competitive. This is yet more positive news for borrowers.'

Hannah Bashford, director at Model Financial Solutions added: 'The battle of the rates is upon us. This can only be good news for borrowers and hopefully a tussle for the top will mean rates trickle below that magic 4 per cent barrier that everyone is so desperate for them to break. 

'If the Bank of England cuts rates in August, it will feel like game, set and match.'

For anyone moving home with a 40 per cent deposit or more, Nationwide's 4.18 per cent will be the market leading rate from tomorrow.

It does, however, come with a hefty £1,499 product fee meaning it may not be the cheapest overall.

Santander is also offering a 4.2 per cent deal with a £999 fee and HSBC is offering a 4.22 per cent with a £649 fee.

Nationwide is also now offering the lowest two-year fix for home movers with a 40 per cent deposit or more.

Its 4.59 per cent deal is falling from 4.79 per cent and comes with a £1,499 fee.

> Find the best rate for you using This is Money's mortgage finder 

Also cutting: Virgin Money has also reduced rates across a number of its fixed rate deals aimed at home buyers, homeowners and buy-to-let investors

First-time buyers also stand to benefit from Nationwide's changes. Those buying with a 25 per cent deposit can now secure a three year fix at 4.77 per cent with a £999 fee.

Nationwide is also cutting rates on some of its remortgage deals as well as across its products aimed at existing customers looking to transfer. 

Virgin Money's rate changes have those buying with smaller deposits in mind - particularly those needing 10 per cent of the purchase price.

But it is also reducing rates aimed at people remortgaging with rates to start from 4.54 per cent.

Its buy-to-let rates are seeing the most significant cuts, however.

It says certain fixed rates with a 1 per cent fee will be reduced by 0.12 per cent and will start from 4.55 per cent, while product transfer fixed rates will be cut by up to 0.2 percentage points and will be starting from 4.49 per cent.