Nationwide cuts 5-year fixed rate

Nationwide this week cut its five-year fixed rate mortgage to 5.39%. The building society says its two-year and 18-month fixed rates will also drop to reflect the fall in bank base rates to 4%.

A £64,000 mortgage with a two-year fix at 4.89% - and a loan to value of up to 75% - would cost £363.01.

The same mortgage on the society's standard variable rate of 5.95% would cost £415.23. NatWest has entered the fray with what it calls its best ever fixed rate deals.

A five-year fix from the bank is also 5.39% and like the Nationwide redemption penalties apply during the period of the fix.

The Portman building soci ety has beaten Nationwide and NatWest with a five-year fix of 4.99% and a two-year fix that drops to just 2.35%, though this offer includes a lock-in with stiff redemption penalties until 2008.

Alliance & Leicester nearly matched the Portman with a five-year fixed deal of 5.14% and a two-year fix costing 4.74%.

Egg has dropped its standard variable interest rate to 4.74%, which beats most mortgage deals let alone rival standard variable rates.