Nottingham Building Society boosts competition with discounted deals

The Nottingham Building Society has reduced a number of its discounted rate mortgages, adding further competition to the market for higher loan-to-value categories.

With the Bank of England describing the Funding for Lending Scheme as ‘no longer necessary’, it will come as reassurance to homebuyers that local lenders are still keen to compete with big-name lenders.

Among the pick of Nottingham’s new offers is the 3-year discounted variable rate mortgage at 80% loan-to-value, which is now available at just 2.59%.

The society has increased its fee to £999, but only £199 of this is required at the point of application, with the remaining £800 to be added to the mortgage.

Nottingham also offers a free property valuation, while remortgage applicants will benefit from free legal fees.

The deal adds to a strong Midlands contingent, with strong offers still available at this loan-to-value range from the Loughborough and West Bromwich Building Societies, and also from Marsden Building Society, based in the North West.

West Brom continues to offer the pick of the deals, with a 2-year fix at 2.39% (£299 fee) on loans up to £500,000.

For new buyers: 90% loan-to-value

Other promising discounted rates from Nottingham include the 3-year discounted variable rate 90% mortgage, which is available at just 3.99%.

With a fee of just £299, plus valuation and legal fee incentives, this deal offers serious competition to major lenders, most of whom are only currently matching this rate with much higher fees.

HSBC’s High Street Special offers 3.59% on a 2-year fix for buyers with a 10% deposit, but the product fee of £1,499 is a steep blow to the pocket.

The Post Office matches Nottingham with a 2-year fix at 3.99%, but once again buyers face a hefty charge of £1,495 to clinch the deal.

On a £150,000 mortgage, the Nottingham deal works out over £400 cheaper than HSBC for the first two years, and almost £1,200 cheaper than the Post Office over the same period.

However, this saving would be compromised if the rate was forced up by an increase to the Bank of England base rate over this period.

(How can I work out the best deal accounting for mortgage rates and product fees?)

Closer competition is offered by the Nationwide, which is offering a 2-year fix at 3.89% with a £900 fee, and similar product specifically for first-time buyers, which is priced at 3.99% with a £400 fee.

But cheaper mortgages are still available through the Monmouthshire Building Society. The mortgages are only available for a maximum loan of £200,000 and are limited to homebuyers in parts of Wales and the South West, but anybody who meets the criteria will struggle to find a better deal elsewhere.

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