Nationwide mortgage rate parts company with the base rate

| April 27, 2009 | 0 Comments
Nationwide mortgage rate parts company with the base rate

Nationwide has announced that customers taking out fixed-rate mortgages will no longer revert to its base mortgage rate (BMR), when the fix comes to an end.

The building society’s BMR, which is the equivalent to a standard variable rate (SVR), has been falling in line with reductions in the base rate and currently stands at a market leading 2.5%.

However, the lender’s BMR is at 3.99%.

The change will be applied to new loans from 30th April and according to Nationwide should increase flexibility in lending and at the same time balance “the needs of savers and borrowers”.

It is worth noting that the change only affects customers taking out new fixed-rate loans and therefore the point at which a borrower reverts to the BMR is at least two years away.

Lloyds TSB, its Cheltenham and Gloucester subsidiary and Intelligent Finance are three remaining lenders committed to tracking the base rate with their SVRs.

In related news, Nationwide is one of several building societies to have had its credit rating downgraded by Moody’s.

Meanwhile, concerns about the UK’s building society sector have been growing, with reports that the Government is preparing a rescue package, after a whistleblower at the Financial Services Authority claims a number of societies have exposed themselves to areas of risky specialised lending.

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