Nationwide fixed-rate mortgages launched

Leading lender Nationwide has launched new fixed-rate mortgage deals, reducing costs for borrowers for the second time within weeks.

The move comes amid speculation that the base interest rate of 4.75 per cent will be reduced by the Bank of England next month.

Nationwide only reduced its rates from 4.69 per cent to 4.49 per cent in June, thisismoney.co.uk reports.

Now borrowers will benefit from a two-year fixed rate deal at 4.39 per cent, provided they have a deposit of at least ten per cent.

A number of other major lenders, including Abbey National, have also announced cheaper fixed-rate mortgage deals amid expectations that the bank's Monetary Policy Committee will reduce the cost of borrowing.

A drop in swap rates – the level at which financial institutions lend to each other – has given lenders fighting for market share the opportunity to offer more competitive fixed-rate deals.

Quoted in The Times at the weekend regarding Nationwide's last move to cut its fixed-rate deals only recently, spokesman Alan Oliver said: "The money markets meant we were in a position to use swap rates to offer this deal."

"We would expect quite a bit of business to come through as customers like the flexibility of short-term deals," he added.