Nationwide is set to cut mortgage interest rates by up to 0.84% in an attempt to support homebuyers.

Britain's biggest building society's new initiative, effective from October 16, will see a reduction of an average 0.23% on 34 of its mortgage deals for people buying a property.

Those who borrow between 60% and 70% of their home's value under society's four-year fixed-rate loan will benefit the most from the plan, as they will see the biggest reduction, dropping from 5.78% to 4.94%.

The group is also launching a series of offers for first-time buyers and a reservation and legal fee free option to borrowers moving to a different home in a bid to reduce the upfront costs associated with buying a new property.

The initiative comes two weeks after Abbey launched its Homebuyer Plus mortgages, which also offer free legal work and do not have an arrangement fee.

A Nationwide spokesman said: "Pricing is changing all the time and we are trying to make sure we offer competitive deals to people interested in moving home."

Under the new range, first-time buyers will be offered the option of either having a £500 discount on their reservation fee, or having a £250 discount and free legal work.

The society also launched two mortgages for homemovers that do not have reservation fees or legal fees, with this option available on two-year fixed rates and two-year tracker deals.

David Hollingworth, of mortgage brokers London and Country, said: "It is quite interesting to see another lender offering free legal work.

"It is symbolic of the fact that lenders are trying to compete with each other again."

He added that it was the second time this month that Nationwide had cut its rates.

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