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Daily Mail
20-05-2025
- Business
- Daily Mail
With the NS&I prize rate set to fall again - SYLVIA MORRIS reveals the savings deals you CAN bank on
Premium bond holders are likely to hear bad news soon. Another cut to the prize rate seems inevitable – and I think it could come as early as the July draw. That is because savings providers are cutting interest rates on their variable rate accounts in their droves, which makes National Savings & Investments (NS&I) offerings look particularly favourable by comparison. The NS&I prize rate has been reduced several times – from 4.4 per cent to 4.15 per cent in December last year, 4 per cent in January and 3.8 per cent last month. But even so, the prize rate is now above the interest rate offered by the big High Street banks and five largest building societies on their easy-access accounts. The one exception is Yorkshire BS Online Easy Access Saver 4, which will pay 4 per cent after its rate cut on June 19. When savings rates tumble elsewhere, NS&I must follow suit. It needs to raise more money for the Government – £12 billion for this financial year which started on April 1, up from £10 billion last year, both with a margin of £4 billion each side. But if its products look too enticing, it risks overshooting its target. Furthermore, if it gives savers a better rate than they can get elsewhere, it upsets the mortgage market as money rushes into NS&I rather than into banks and building societies to lend to home buyers. The prize fund will be in the firing line because Premium Bonds are NS&I's best seller making up 55 per cent of the £230 billion or more we hold with the Government-sponsored savings arm. Even though the prize draw fund has fallen over the past 12 months, we still ploughed another £6.5 billion into Premium Bonds. They have been a favourite with some savers lured by the chance of winning the £1 million tax-free jackpot each month or even a smaller prize from a meagre £25 to £100,000. Granted, some easy-access accounts from NS&I's rivals still pay well over 4 per cent. The best is from online bank Cahoot, part of Santander, which pays 5 per cent. But it only offers this on the first £3,000 in the account and the rate could drop soon. Atom Reward pays 4.75 per cent but only if your money remains untouched for 12 months. With Coventry BS, you can see 4.5 per cent in its 4 Access Saver, but you only get this rate if you don't take money out more than four times a year. I don't include these in my best buy tables but instead concentrate on those that give you easy access to your money. The best rate with no strings attached comes from Family BS with its Online Saver at 4.55 per cent – launched yesterday. Kent Reliance pays 4.46 per cent for new customers only. If you have an older account, the rate is likely to be less. ISA loyalty may prove costly tactic Don't fall into the trap of simply renewing your one-year fixed-rate bond or Isa with the same provider. Rates on these accounts change all the time. This time last year, 18 providers were paying 5 per cent or more. Some of these now pay mediocre rates at best to those who renew their bonds. New names such as Chetwood Bank (4.36 per cent), Birmingham Bank (4.36 per cent) and JN Bank (4.35 per cent) pay top rates. Meanwhile, those such as Stream, Beehive, Allica Bank, MBNA (part of Lloyds) and OakNorth have slid down the ladder, paying between 3.8 per cent (Nottingham) and 4.1 per cent (MBNA).
Daily Mail
22-04-2025
- Business
- Daily Mail
Nationwide cuts mortgage rates and now offers best buy for home movers
Britain's biggest building society has made cuts to its mortgage rates, with the deals including a new best-buy for home movers. Nationwide has reduced its rates by up to 0.25 percentage points, including a deal for home movers with 40 per cent deposit which is now offered at 3.89 per cent. The mortgage, available on either a two or five-year fixed rate, is the cheapest rate on the market currently, though it comes with a large fee at £1,499. On this mortgage, someone buying a £250,000 home on a 25-year term would repay £783 per month. A lower-fee option is available at 3.94 per cent plus a £999 arrangement charge. After the 3.89 per cent rate, the next-cheapest rate for the same circumstances is 3.91 per cent with Yorkshire Building Society, which has a £999 fee. Last week, multiple lenders slashed their mortgage rates including Yorkshire BS, Virgin Money, HSBC and Santander. This is in response to forecasts that the Bank of England will reduce its base rate more times than previously expected this year, though experts have warned that mortgage rates do not have much further to fall. For the first time in several years, there are also rates on two-year mortgages which are cheaper than their five-year equivalents. Today, the average five-year fixed rate is 5.12 per cent and the average two-year fixed rate is 5.23 per cent. Nationwide has also reduced its two-year fixed rate for those with a 15 per cent deposit to 4.4 per cent. This deal comes with a £999 fee and is not a best buy, with similar deals available with rates as low as 4.32 per cent, or 4.17 per cent if they are willing to accept a £1,495 fee. The rates are open to both existing and new customers moving home, and will be available from 23 April. For first-time buyers, Nationwide's rates now start at 4.09 per cent. Those with a 40 per cent deposit can get a 4.09 per cent rate on a two-year fix, with a £1,499 fee, or a 4.14 per cent rate with a £999 fee. For first-time buyers with a 10 per cent deposit, Nationwide is offering a two-year fixed rate of 4.72 per cent with a £999 fee. The cheapest 10 per cent deposit deal on the market is 4.43 per cent with Yorkshire Building Society on a two-year fix, though this comes with a £1,495 fee. The same lender offers a 4.58 per cent rate with a £245 fee. Henry Jordan, of Nationwide, said: 'We know that rate is an important factor for borrowers looking to buy their first home or move onto their next. 'These latest cuts should put Nationwide firmly on the radar for first-time buyers and home movers as we continue to be one of the most competitively priced lenders in the market.' Riz Malik, director at Essex-based financial adviser R3 Wealth, added: 'Nationwide waited until after the Easter break to take the axe to their rates with new borrowers and home movers alike benefiting from the lowest fixed deals. 'Given current market movements, the next seven days may see even more cuts as the expectation for future rate cuts increases. If you have an application or an offer and the deal has not completed yet, speak to your broker.' Best mortgage rates and how to find them Mortgage rates have risen substantially over recent years, meaning that those remortgaging or buying a home face higher costs. That makes it even more important to search out the best possible rate for you and get good mortgage advice. Quick mortgage finder links with This is Money's partner L&C > Mortgage rates calculator > Find the right mortgage for you To help our readers find the best mortgage, This is Money has partnered with the UK's leading fee-free broker L&C. This is Money and L&C's mortgage calculator can let you compare deals to see which ones suit your home's value and level of deposit. You can compare fixed rate lengths, from two-year fixes, to five-year fixes and ten-year fixes. If you're ready to find your next mortgage, why not use This is Money and L&C's online Mortgage Finder. It will search 1,000's of deals from more than 90 different lenders to discover the best deal for you.
