Nationwide changes again!

Luv2Budget

Nationwide borrowers who rent out their homes face a massive 1.5 percentage points rise in their interest.
Price hike: Nationwide has increased fees for borrowers who rent out their home
This change, affecting borrowers who need to let their home for more than six months, will add £129 a month to a £150,000 repayment mortgage.



It will be introduced on September 1 for new applications and from December 1 for those who have been letting for at least three years.

The punishing increase comes as part of a raft of new fees for Nationwide's 1.4m borrowers.

These include a £20 fee for changing the term of the loan, a £50 charge for switching from a repayment mortgage to interest only or vice versa.

Those renting their home will have to cough up a £75 fee on top of the mortgage rate rise.

An internal document seen by Money Mail states: 'The charging of fees will generate significant income for the group.'

David Hollingworth, from mortgage broker London & Country, adds: 'It looks like Nationwide is trying to give up its saintly stance which has set it apart from other lenders.'

Last month the building society came under fire for banning customers from withdrawing amounts of less than £100 over the counter.


No public announcement has been made about the changes, but the firm started to write to all its borrowers on Monday.

Nationwide says the charging of fees brings it in line with other lenders. The document states: 'We feel that it is fair that costs and fees should be borne by those customers who make use of these services rather than all costs being borne by all customers.'

From December 1, they will also remove CAT standard rules for mortgages taken out between 2001-2003. These promised rates would never rise more than 2 percentage points above base rate.
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Nationwide claims this will not result in rate increases, but borrowers will no longer be guaranteed three months' notice of changes to the terms of their loan, including fee hikes.
A spokesman says: 'These charges are very conservative and at the lower end of the market.'

pencekeeper

Great post - very useful news.

These include a £20 fee for changing the term of the loan

That will affect me, and hence I better get my skates on if I want to avoid it assuming it's not in place yet.

Shame Nationwide is going down this route. They were in my opinion the best lender - looks like the need to raise money will put them more in line with the banks. Shame.

Luv2Budget

Hi Pencekeeper,

I know, if this is true, it is a real shame. Lots of people on this site with Nationwide mortgages reduce their term and there is no charge. A real pity. They have really changed - it seems like that 2.5% rate is killing them.

The £50 charge to change from repayment to interest only is really steep. People who need to change to interest only obviously do this to help them out financially in the short term, to charge them £50 is really out of order.

pencekeeper

Though they have slashed savings rates too, so the low interest rates go both ways (though perhaps not equally).

According to http://www.nationwide.co.uk/pdf/mortgages/mortgage_fees.pdf it looks like none of this will take effect until the 1st September 2010. So well done for posting this (I don't read the mail ).

I strongly suggest anyone who wants to make changes does it now. I wonder what other charges make be enacted - particularly clawing back overpayment reserves etc (although now withdrawn from new products anyway).

pencekeeper

More info at: http://www.nationwide.co.uk/mortgages/usefulinformation/changes-to-fees.htm

Luv2Budget

Yes I wonder what other charges they will bring in too. Hopefully it won't affect me too much because I'm hoping to pay off my mortgage in around 4 years time, if possible!

I just cannot believe they are doing this - what happened to their good reputation for looking after customers.

I think a lot of people will be really upset about the changing of term fee - I read so many on this site who currently do this, and they say it is such an easy process.

golfiematt

if this is true, i will vote with my feet

pencekeeper

golfiematt wrote: »

if this is true, i will vote with my feet

It is. It's on Nationwide's website.

I'll stick with Nationwide whilst there's not a better alternative (which I don't think there is for my circumstances). Also if all goes to plan I'll be MF before the end of the year anyway - still don't like this development though.

Numenor

Does this apply to overpayments too, by saying "I want to overpay £500pcm and have the monthly payment remain the same, thereby reducing the term"?

If so, this stitches most of us right up!

sasaya

I agree Numenor - A right pain, as it would reduce an overpayment of £500 to effectively only £480. Does anyone know if this applies or not?

snowmen

Numenor wrote: »

Does this apply to overpayments too, by saying "I want to overpay £500pcm and have the monthly payment remain the same, thereby reducing the term"?

If so, this stitches most of us right up!

need some clarity on this.

tried to open the pdf file on the nationwide website but it wont open. If anyone has more luck can they post the new fees here and say if they only apply to mortgage holders who rent their home or everyone?!
thanks