Nationwide ups variable rates

alphason

From Daily Mail today:

"The Nationwide scrapped its promise that customers on its standard variable rate would never pay more than 2 percentage points above the Bank of England base rate...
...those applying for a home loan with the Nationwide will no longer be able to move on to its base mortgage rate, currently 2.5 per cent, when their special-rate deal ends. Instead they will switch to a new standard mortgage rate, which will start at 3.99 per cent...
...customers who are already on the base mortgage rate will remain on it unless they remortgage, and those on deals taken out before the end of the month on Thursday will continue to revert to the BMR when their current loan comes to an end"

Nothing about it on the Nationwides media centre pages yet.

I'm on the BMR which is currently a competitive 2.5%, for various reason I am not able to change my mortgage provider easily so have been monitoring Nat's fixed rates so I can jump if they start to increase (Can reserve the rate for 3 months time). Anyone hear of any fixed rate changes due to happen soon at Nat to coincide with this move?

Robert_Sterling

That all seems reasonable.
It is after all a Standard Variable Rate.

alphason

Robert_Sterling wrote: »

That all seems reasonable.
It is after all a Standard Variable Rate.

Yes but a Standard Variable Rate that was guaranteed to be no more than 2% above base.

Bargain_Rzl

alphason wrote: »

From Daily Mail today:

"The Nationwide scrapped its promise that customers on its standard variable rate would never pay more than 2 percentage points above the Bank of England base rate...
...those applying for a home loan with the Nationwide will no longer be able to move on to its base mortgage rate, currently 2.5 per cent, when their special-rate deal ends. Instead they will switch to a new standard mortgage rate, which will start at 3.99 per cent...

Bit confused about the bit in bold.

Does that mean that people already on the BMR will remain on it, and it will remain subject to the BoE+2% cap, but that new customers or those not yet out of their deal period will go onto a 3.99% rate?

Because from the text above, it doesn't look like the "new standard mortgage rate" is necessarily the same thing as "BMR".

luckyfool

It's not. People already on contracts reverting to the BMR with a 2% above base cap will remain so.

New customers, probably including people taking a new product who are already mortgage holders, from Thursday will revert to a new reversionary rate product "SMR", allowing Nationwide to weasel out of their BMR commitment on new deals. Why they don't do what Woolwich do, which is revert each product to a BBR tracker I don't know. That would stand up in court, this is possibly a bit iffy (though I'm sure they have taken advice). They could sell new deals with a 3% over base revert rate tracker, and people wouldnt really have a grounds to complain.

Bargain_Rzl

So the OP will be fine remaining on BMR for now (as will I)

Newbird

Oh poo! Just about to go with NW, but not before Thursday.

samba

I know it's a bit off-topic but I'm concerned about the state of play at Nationwide - over the last six months or so the interest rate on my overdraft has gone up and up, and is now almost 18% (I realise this is par for the course these days). Additionally, they are soon to start charging for foreign currency conversions on their credit and debit cards (again I realise that they are only going to charge what visa charge them, but still... ) . This latest move makes me wonder if there are deeper issues involved?? Surely they are not doing all this to pay for the champers at the shareholders party?

Personally, I am now on the look out for a new bank account (just a shame I wasn't looking a month ago...)

Newbird

Think to be fair they are just being cautious. They don't need to get left behind with getting their income in and stabilised, especailly as they are still willing to lend for mortgages where a lot won't.

I think they will therefore be getting more mortgage business, which will be good, but has to be balanced with the higher risk they are taking with the increase in lending, if you follow me?

RufusA

samba wrote: »

Surely they are not doing all this to pay for the champers at the shareholders party?

AFAIK they don't have any shareholders - they are one of the few remaining big building societies, therefore any champers being bought will be for its members i.e. you! Chance would be a fine thing though!

Rufus.

Trying_to_be_good

Maybe they'll be able to start paying decent savings rates again with this change?

Fingers crossed