Spotlight On: Nationwide two-and three-year fixed mortgages

The deal

One of the UK's largest lenders has joined the race to the bottom as mortgage providers cut fixed-rate deals. From this week, all two-year fixed mortgage rates will reduce by 25 percentage points and some three year offers will drop by 50 percentage points.

The good points

It is good to see mortgage rates drop, and on three year deals, the reduction offers buyers a new top deal at 2.89 per cent for a maximum loan to value of 70 per cent with a product fee half that of some competitors. For first-time buyers, a £500 discount on the £900 product fee for some products is welcome.

The bad points

If you don't have 30 per cent of the asking price, the best buy rate for your mortgage soon slips away. And watch out for the booking fee on top of the product fee.

Conclusion

The move follows Nationwide's decision to reduce five year fixed rate deals last week and comes amid a spate of rate cuts. Those who can afford to see how low rates go, alongside falling house prices, could benefit further if they can hold their nerve. Otherwise if you've got the 30 per cent deposit stashed away these rates could be worth further investigation.