Rising mortgage rates again at Nationwide
October 23rd, 2008 by Len
UK’s biggest building society announced it was raising rates on its loans for the second time in just over a week.
Nationwide, the UK’s largest building society has just announced 0.24% – 0.6% interest rate rises on their tracker deals.
As of today a 3 year tracker deal for a mortgage borrower who has a 40% deposit will now cost them 6.18% in interest yet last Monday the same tracker would have carried a 5.64% interest rate.
Mortgage borrowers with smaller deposits are seeing a bigger interest rise on trackers at Nationwide, on larger loans this is an additional 0.6% higher.
Their lifetime Mortgage Tracker deals offer borrowers who have less than 25% deposit a full 2.03% above the Bank of England base rate.
After the 2 recent rate increases Nationwide will more than offset the 0.5% Bank of England base rate fall, which is the saving that Nationwide has said it will pass to all its borrowers as of 1st November!
The Director for Mortgages at Nationwide, Matthew Carter, claimed that the rate changes had been driven by market conditions and competitor changes in the market.
“It is regrettable that we have to increase our tracker rates, but we must take into account ongoing volatility in the wholesale markets and the high cost of funding. These changes will allow us to maintain control of the volume of business the society is attracting, and to continue lending in a responsible and prudent way.”
Senior Technical Manager, Ray Boulger of mortgage brokers John Charcol, claimed that the decision of Nationwide’s in re-pricing its Tracker deals so quickly may be a result of competitors completely pulling out of the mortgage tracker market:
“The fact that Nationwide have increased the margins on larger loans suggests they were getting too much business above 75% LTV, in the future we are going to see tracker margins go up and fewer trackers to choose from,”
HSBC are the only bank so far to announce in a formal manner that it will not be reducing its current standard variable rate, although other banks have so far made no announcements at all.
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