In a significant move for borrowers, Nationwide Building Society has become the fifth major lender to offer home loans with rates under 4%.

The move signals a heating up of the mortgage market against the background of a fall in the interest rates that financial institutions charge each other to borrow money.

Starting today, Nationwide will implement rate cuts of up to 0.25 percentage points on selected two, three, and five-year fixed-rate mortgage products.

The lender's lowest five-year fixed-rate mortgage will now be available at 3.99% for existing customers switching to a new deal and new customers remortgaging with at least 40% equity in their home. The deal carries a £999 fee, translating to monthly repayments of approximately £1,054 on a £200,000 mortgage over a 25-year term.

First-time buyers will also benefit from Nationwide's revised rates. Those purchasing a home with a 10% deposit can secure a five-year fixed mortgage at 4.74%, also with a £999 fee. Meanwhile, home movers with a 40% deposit will find five-year fixed rates as low as 4.02%, while those with a 15% deposit can access rates from 4.39%.

Nationwide joins other high-profile lenders in reducing rates, reflecting growing competition and falling funding costs.

* Barclays also offers a 3.99% five-year fix, but only to Premier Banking customers or those purchasing energy-efficient homes with an EPC rating of A or B.

* Santander currently offers a two-year fix at 3.99% for those with a 40% deposit, though it comes with a higher £1999 fee.

* HSBC has a five-year fixed rate at 3.98%, though it is exclusive to Premier Banking customers who meet strict income and savings criteria.

* First Direct provides a five-year fixed rate at 3.99% with a more modest £499 fee for remortgaging customers.

Mortgage brokers and industry analysts have welcomed the news, predicting further rate cuts as lenders compete for market share.

Steve Humphrey, Founder at The Mortgage Pod, noted: "Nationwide nails it. With swap rates dropping, it's great to see a quick response from Nationwide in repricing its fixed-rate products. This move signals the start of a mortgage rate war, which we hope will continue."

Pete Mugleston, Managing Director at Online Mortgage Advisor, emphasised the importance of proactive borrowing strategies. "Nationwide's rate cuts are great news for borrowers and reflect increasing competition as funding costs ease. We may see further reductions, though significant cuts remain unlikely. Instead, we expect incremental adjustments as lenders respond to market demand."

Jamie Elvin, Director at Strive Mortgages, shared a similar sentiment, predicting further reductions. "Lenders are jostling for market share, and with the cost of funds falling, additional rate cuts are likely-especially as month-end approaches and banks push to meet lending targets."

The reductions come as a welcome relief for borrowers, particularly those looking to remortgage or enter the housing market. Over the past two years, mortgage rates have surged, making homeownership more expensive. The recent cuts suggest a shift toward a more competitive lending environment, providing borrowers with an opportunity to secure better deals.

Justin Moy, Managing Director at EHF Mortgages, told Newspage: "More good news for borrowers, as competition and lower swap rates begin to reinvigorate the mortgage market. With reductions of up to 0.25%, these are significant changes that will be welcomed by homebuyers and those looking to borrow more."

While industry experts anticipate further rate adjustments, they advise borrowers to remain vigilant. Securing a mortgage at the right time could mean locking in a better deal before rates fluctuate again.

As inflation trends stabilise and market conditions improve, the mortgage market may see a gradual softening of rates-but a return to historic lows remains unlikely.