Nationwide raises deposit on best-value mortgages
Nationwide has today increased the minimum deposit required to secure its best mortgage interest rates, from 10% of the value of the property, to 25%.
The move means that first-time buyers in London, where the average price of a home exceeds £300,000, will have to raise at least £75,000 to benefit from lower interest rates.
For those with less than a 25% deposit, the rate increases by 0.2%, removing much of the benefit of last month’s base rate cut.
A Nationwide spokeswoman explains: “Our costs of funding are higher and, like all lenders, we have to adapt to changes in the market place.”
The building society’s action comes in addition to last week’s withdrawal by leading lenders of 100%+ mortgage products.
According to Melanie Bien of Savills Private Finance, “we’re not seeing anybody going after market share” and other lenders can be expected to follow suit to protect profit margins.
Ms Bien adds: “Six months ago, you could find tracker rates at just below the Bank of England base rate, but now they are at least 0.5% above base rate.”
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