The UK’s largest building society has slashed its cheapest mortgage rate to an eight-month low and significantly under the Bank of England’s base interest rate.

Nationwide now offers new remortgaging customers a 3.84 per cent rate on a five-year fixed deal. And existing mortgage holders can get the low rate on additional borrowing and switcher deals, also on five-year offers. New members and first-time buyers can get a slightly higher five-year fixed rate of 3.85 per cent.

Nationwide is also reducing selected two, three, five and ten-year switcher rates at 95 per cent by up to 0.81 per cent with rates starting from 3.84 per cent. 

These latest changes also continue Nationwide’s existing mortgage member pricing pledge, meaning the switcher product rates will be the same or lower than the remortgage equivalents. 

Nationwide is reducing rates and for existing customers moving home by up to 0.80 per cent and introducing a range of products with £1,499 fee, with rates now starting from 3.85 per cent. Rates for additional borrowing will be reduced by 0.81 per cent and will now start from 3.84 per cent.

Henry Jordan, director of home at Nationwide Building Society, says: ““s one of the largest lenders in the country, we remain as committed as ever to supporting borrowers. These latest changes mean we are now offering sub-four percent rates for the first time in eight months.  These reductions will ensure that we have some of the lowest rates on the market for all types of borrowers whether it be first-time buyers, home movers or those looking to remortgage or switch deal.” 

Banks and building societies have since November been in a lending rate war with major players taking part – for example, Barclays has recently taken up to 0.6 per cent off fixed rates. 

But recent increases in money market swap rates – which largely determine the pricing of new fixed deals – have prompted some lenders to increase their rates. For example, Santander announced small increases to some fixed-rate deals taking effect from late last week.