Nationwide increases mortgage rates
Monday, 02 Jun 2008 17:18
The Nationwide building society has increased the cost of borrowing on the majority of its fixed-rate mortgage products.
The high street lender – the largest building society in the UK – blames the "significant" increase in swap rates for the decision.
Following the change the company's two-year fixed-rate has seen interest rates increase to 6.25 per cent, up from 5.95 per cent, with a £599 fee.
A two-year fixed-rate is available at 6.65 per cent without a fee.
Nationwide has also raised the cost of a three-year fixed-rate deal to 6.05 per cent, from 5.75. First-time buyers can secure the deal with a £299 fee, with home movers paying £599.
Five-year, ten-year and 25-year fixed-rate deals have all increase to 6.10, 6.14 and 6.28 per respectively, all with a £599 fee.
"As a building society we always aim to offer our members the best possible deals. Following the cuts to base rate over recent months we have passed on the full decreases to our tracker rate and base mortgage rate borrowers," said Matthew Carter, divisional director for mortgages at Nationwide.
"We were also able to announce cuts to some of our fixed rate mortgages earlier this month as a result of decreases in money market swap rates.
"However, swap rates have risen significantly in the last few weeks and as a result it has been necessary to increase the rates on our fixed rate mortgages. While markets remain volatile we can expect to see frequent changes to fixed rates across the industry."
The cost of remortgaging has also increased.
Nationwide has pushed the cost of a two-year fixed-rate remortgage up to 6.45 per cent, with a with £599 fee. Again a two-year deal with no fee is up for grabs 6.85 per cent.
Three-year fixed-rate deals now attract a rate of 6.05 per cent, and a with £599 fee, with five-year, ten-year and 25-year deals now come with rates of 6.20, 6.14 and 6.28 respectively for remortgagers, as well as a £599 fee.
All new deals come into force at midnight tonight.
Nationwide's announcement came on the same day the UK's biggest mortgage lender, the Halifax, cut an average of 0.3 per cent from its various fixed-rate mortgage products.
Chris O'Toole