Nationwide Building Society has become the first lender to reintroduce a 95 per cent loan to value (LTV) mortgage to its existing customers.
However, the 95 per cent mortgage
deal does not come without catches. Borrowers wanting the deal on a two year fixed rate mortgage
will have to pay an interest rate of 7.18 per cent, 5.18 per cent above the current Bank of England base rate.
The rate is available with no fee; however, a minimum of £25,000 must be borrowed. Other 95 per cent deals on offer include a rate of 6.78 per cent for a fee of £599 or a rate of 6.68 per cent for a fee of £995.
The news, despite the deal's shortfalls is encouraging as the mortgage market has so far failed to revive despite drastic interest rate cuts and Government intervention. However, the lender has put up the interest rates on its 85 per cent LTV fixed rate deals.
The changes come into effect today, along with the re-launch of a two year tracker mortgage to the building society's range. The best two year tracker mortgage
rate now available from Nationwide building society
is 5.49 per cent with a 60 per cent LTV and deposit of £995, however, this rate will fall to 4.49 per cent from January 1 2009.
Commenting on the new additions, Mathew Carter, divisional director of mortgages at Nationwide said: "We are pleased to be in a position to re-enter the Tracker mortgage market with a new two year product.
"As part of our ongoing commitment to existing borrowers during these difficult times, we have introduced a new, higher, LTV tier.
"The new tier, which is available to Nationwide mortgage
customers who are moving home and require additional borrowing, will ensure that they continue to benefit from a range of fixed and tracker mortgage options," he added.
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