Nationwide has announced it is reducing selected rates for existing mortgage customers looking for a new deal and fixed rate early repayment charges.
As part of the Nationwide Loyalty Rate Mortgages initiative, which compares the society’s mortgage rates for existing customers to those of its top six high street competitors, selected switcher rates will be reduced by up to 0.45 per cent.
For two-year fixed rates, the 70 per cent loan-to-value deal with a £999 fee is reduced to 1.89 per cent, the 75 per cent LTV with a £999 fee is also reduced to 1.89 per cent, and the 80 per cent LTV deal with a £999 fee reduced is to 2.29 per cent.
For five-year fixed rates, the 70 per cent LTV deal with a £999 fee is reduced to 2.94 per cent, the 75 per cent LTV deal a £999 fee reduced is to 3.04 per cent, and the 80 per cent LTV deal with a £999 fee reduced is to 3.44 per cent.
Finally, for two-year tracker rates, the 60 per cent LTV deal with a £999 fee is reduced to 1.44 per cent, along with the 70 per cent and 75 per cent LTV deals, and the 80 per cent LTV deal with a £999 fee is reduced to 1.94 per cent.
The lender also announced that it is to apply a “reducing scale approach” to all fixed rate mortgages taken out from tomorrow, where customers need to redeem their loan, or overpay by more than 10 per cent of the initial balance per year, before the end of the fixed rate period.
The new structure, where charges reduce each year, means that customers who need to move towards the end of their fixed rate mortgage period will now pay less to exit. Previously this early redemption charge would have remained at the same level throughout the fixed rate period.
The scale for redeeming the loan before the end of the fixed rate period will be consistent across all existing two, three, four and five year fixed rate mortgages, lowering the potential cost to 1 per cent per year remaining on the customer’s deal.
Richard Napier, Nationwide’s director of mortgages and savings, commented: “Adopting this new more flexible approach across all our fixed rate mortgages clearly demonstrates the tangible difference our mutuality and our way of doing business can deliver.”
peter.walker@ft.com
