Nationwide punishes mortgage payers but rewards savers
08 November 2003
Nationwide, Britain's biggest building society, imposed unexpectedly large rises in mortgage payments on hundreds of thousands of borrowers yesterday when it chose to increase rates by 40 per cent more than the Bank of England base rate increase.
Borrowers with a Nationwide SVR repayment mortgage of around £200,000 can expect to pay about £482 more per year, following an increase in the company's standard variable rate mortgage by 0.35 points to 4.89 per cent from December 1st.
Conversely, a similar increase will translate to interest rates on some of the society's individual savings accounts and e-saving accounts of around double the rise in the base rate, bringing substantial benefits to the building society's savers.
The rate increases appear to mark a change in strategy for Nationwide, which had previously cut its SVR by 0.1 points following a base rate cut of a quarter point in September of this year.
Ray Boulger, with the mortgage broker Charcol, predicted that many of the country's biggest lenders will pass on the full 0.25 percentage point increase by the end of the weekend.
At the close of business last night, most banks and building societies claimed they were in the process of reviewing rates.