Moneysupermarket comment on Nationwide’s decision to raise mortgage rates
Commenting on Nationwide’s decision to raise rates on its tracker mortgages and fixed rate mortgage deals by up to 0.6 per cent and withdrawing some of its most popular mortgage deals, Louise Cuming, head of mortgages at price comparison site Moneysupermarket.com, said:
” Yet another door has slammed shut in the face of homeowners with one of the UK’s biggest lenders giving the consumer the cold shoulder. Our own research showed that just three months ago, Nationwide was the UK’s most trusted financial brand, but this trust may now be damaged. I understand it wants to protect its margins in this frosty environment, but this decision might not help Nationwide in the long-term.
“This is the culmination of a dire week for borrowers, with a raft of smaller lenders also moving the goalposts for their customers by withdrawing product ranges and upping rates. People heading towards the end of their deals, who might be starting to panic, should stay calm and shop around early. Look around five months before the end of your term as there are some good value deals on the market, particularly for those with a good credit record and substantial equity in their homes.”
I think Louise is right and it looks like lenders are starting to pull their most competitive deals now. Mortgage industry experts are predicting that the Bank of England may cut interest rates in April and if Banks start to withdraw their most competitive deals now it gives them the time to re-position their mortgage products and increase profit margins.
Another major lender to withdraw mortgage deals last week was Alliance and Leicester. They withdrew the very competitive, 4.99 per cent two year Fixed Rate Mortgage as from the close of business on Saturday 29 March 2008.
Head of Mortgage Products at Alliance & Leicester, Richard Taylor, says: “Over the past few days we have seen a high demand for our 4.99% two year fixed rate product and therefore we have taken the decision to remove it from the range, in order to manage the volume of business we are receiving at present.”
This is the last thing the 1.5 million remortgagers in 2008 need, lenders pulling their most competitive mortgage rates…Compare Mortgages Now!
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