Finance News

Nationwide Joins String of Lenders Raising Rates

Nationwide has become the latest mortgage lender to announce that the cost of borrowing will increase for its customers, following both HSBC and Santander, two of Britain’s biggest lenders, changing their rates or removing their best deals.
The move is unsurprising, given that so many banks recently have been looking to make more money from their borrowers, but it does highlight a worrying trend and demonstrates that nobody is immune from it. The biggest problem with this recent spate of rises is that it comes so soon after the Bank of England put into place its Funding for Lending scheme, which was intended to allow banks to reduce the cost of borrowing, thus kick starting the economy once again.

As rates all start moving up, Andrew Montlake, from the mortgage advisors Coreco, says that “we will see an ebb and flow without too much reasoning behind it as lenders dip in and out of the market. It is harder than ever to predict whether the low products around now will still be here in a week let alone a few months and for this reason borrowers should do what they feel is best for them now rather than trying to “beat” the market.”

The other big change that Nationwide have enacted is introducing a two-tier system, with existing customers able to get better deals on their mortgages than new customers. This is a great way for them to advertise lower rates than most people can get whilst also encouraging them to move across and become Nationwide customers.

There are plenty of little tricks that lenders can employ to help them win over borrowers, and with even the experts unable to predict where the markets will move in a few months time, the best thing for anybody looking to take out a mortgage at the moment is to shop around for the best deals and see what they can get which is affordable for them right now.

It may be the case that you could get a better deal in a few months, but you could just as equally get a worse deal, and that might take buying a property out of your price range.