Ahead of the Bank of England’s interest rate decision, Nationwide has cut mortgage rates by up to 0.28% after the US and Iran agreed a tentative peace deal.

The building society cut rates across its fixed mortgage range yesterday, with 4.29% the lowest rate on offer.

The new rates include: 

• Reductions of up to 0.20% across two, three and five-year fixed rate products up to 95% Loan-to-Value (LTV) for first-time buyers
• Reductions of up to 0.28% across two, three, five and ten-year fixed rate products up to 90% LTV for remortgages
• Reductions of up to 0.17% across two, three, five and ten-year fixed rate products up to 95% LTV are also on offer for existing and new customers moving home

Rohit Kohli, director at Romsey-based The Mortgage Stop, says it “is welcome news for borrowers, especially after mortgage pricing moved upwards sharply following the outbreak of the conflict”, but warned against “linking this reduction too directly to the Iran and US news of a peace deal”. 

“A lender of Nationwide’s size will usually have planned this repricing several days ago, based on swap rates, funding costs and competitor activity. That said, the market reaction to the proposed peace deal matters,” he said.

This was echoed by Shaun Sturgess, director at Swansea-based Sturgess Mortgage Solutions, who warned against complacency, saying the rate cuts were likely “planned before the news about the war ending”.

“People should not assume rates are now definitely heading in one direction as we have seen how quickly things can turn in the past,” he said.

But David Stirling, independent financial adviser at Belfast-based Mint Wealth, said Nationwide “aren’t alone” and NatWest, Halifax, Barclays and others “have already trimmed rates this month”.

“This direction of travel is good, but with the Bank of England meeting and inflation still above target, this isn’t the moment to assume rates can only go one way. If you’re thinking about buying or remortgaging, now’s a good time to have a conversation,” he added.