Nationwide and Alliance & Leicester hike mortgage rates

04 June 2008 / by Daniela Gieseler
Two of Britain's largest mortgage lenders, Nationwide and Alliance & Leicester, have announced an increase in their fixed-rate and tracker mortgage deals, which apply from June 3.

Nationwide mortgage rates have risen on fixed-rate mortgage deals by up to 0.3 percentage points. The two-year fixed rate mortgage, for example, is now available from 6.25 per cent and a five-year fixed rate from 6.10 per cent, both with a £599 initial fee. Remortgage rates for the same periods have increased to 6.45 and 6.20 per cent respectively.

"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," Matthew Carter, divisional director for mortgages at Nationwide, said.

"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," Mr Carter continued, and went on to justify the new increases, saying:

"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."

He also warned consumers that due to the market's current volatility, frequent changes to fixed rates could be expected across the mortgage industry.

Alliance & Leicester introduced a new two-year base rate tracker mortgage product at 5.89 per cent, which is 0.89 percentage points over the Bank of England base rate, for customers with a deposit of at least 25%. It comes with a two per cent arrangement fee, but there are no early repayment charges.

The rates for A&L's two and five-year fixed-rate deals are up 0.15 each to 6.14 and 7.14 per cent respectively. Customers will be able to borrow up to 75 per cent for the two-year fixed rate, and up to 90 per cent for the five-year fixed rate mortgage. Both come with a 10 per cent overpayment facility.

Both lenders also offer a range of other mortgages that might be better suited for your particular needs. It is always worth shopping around and comparing mortgages from different lenders in order to get the best deal.

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