Nationwide boosts mortgage deals ahead of interest rate decision

Nationwide has slashed its mortgage rates for the second time in the space of a week, ahead of the Bank of England’s interest rate decision on Thursday.

The building society has taken the chop to its home loan prices, with a 0.28 percentage-point reduction. It follows a 0.12 cut on 10 June.

The move comes as interest rate hike expectations are cool following the US and Iran sealing a peace deal, bringing long-awaited calm for borrowers and lenders.

Volatility in the market has been driven by the repricing of swap rates, which serve as a primary benchmark for pricing fixed-rate mortgages and reflect expectations for future interest rates over 2, 5, or 10-year terms. 

Inflationary pressures driven by the soaring price of oil had led to interest rate cut expectations being kicked back and growing fears of a hike. 

Lloyds Banking Group forecast in its first-quarter results that the first interest rate cut would arrive in the third quarter of 2027.

But some relief arrived in the market and helped quell expectations of an increase in the Bank’s base rate after oil fell to a three-month low below $83 per barrel on confirmation of a deal to stop the fighting in the Middle East.

The announcement sent oil prices tumbling to a three-month low, easing the energy shock that has gripped global economies. In the US, inflation hit a three-year high of 4.2 per cent in May. Fresh UK figures are set to be released on Wednesday.

David Hollingworth, associate director at broker L&C mortgages, said the peace deal should “give mortgage lenders more room for manoeuvre and could pave the way for others to cut rates in response.”

“Of course there’s been so much uncertainty that it’s been a bumpy ride for market rates, so we can’t assume that it’s one way traffic but a peace deal that persists should brighten the outlook for mortgage borrowers.”

The mortgage market faced mayhem throughout the conflict, with deal lifespans hitting a record low as lenders frantically pulled deals. 

The average mortgage was on the market for just eight days in March – the lowest since records began in November 2011. 

This marked a staggering drop from 14 days in February ahead of the conflict breaking out and massively undercuts the previous record of 12 days in July 2023.

Overall product choice on the market shrank by around 1,283, falling below 7,000 for the first time since November 2025 – when markets were on edge as tax speculation ran rife ahead of the Autumn Budget.