Key facts
- Nationwide Building Society has cut mortgage rates by 0.28 percentage points.
- This is the second rate cut by Nationwide in a week.
- The cuts precede the Bank of England's interest rate decision on Thursday.
- A peace deal between the US and Iran has reduced market volatility and eased expectations of interest rate hikes.
- Oil prices have fallen to a three-month low, alleviating energy price shocks.
- The average mortgage deal lifespan hit a record low of eight days in March.
Nationwide Building Society has initiated a round of mortgage rate cuts, reducing its home loan prices by 0.28 percentage points. This marks the second such reduction by the building society within a week, occurring just ahead of the Bank of England's anticipated interest rate decision on Thursday.
The market has seen a cooling of expectations for interest rate hikes, influenced by a recently established peace deal between the US and Iran. This development has brought a measure of calm to borrowers and lenders alike. The reduction in oil prices to a three-month low, following confirmation of the Middle East conflict's cessation, has helped to alleviate inflationary pressures that had previously fueled concerns about potential rate increases.
David Hollingworth, associate director at broker L&C mortgages, commented that the peace deal should provide mortgage lenders with greater flexibility and potentially encourage others to follow suit with rate reductions. He cautioned, however, that market rates have been volatile, and sustained peace is necessary to brighten the outlook for mortgage borrowers.
The mortgage market has experienced considerable turmoil, with deal lifespans reaching a record low of eight days in March, significantly shorter than in previous months and years. This period of instability also saw a reduction in overall product choice, falling below 7,000 for the first time since November 2025.