Nationwide cuts costs for cash-rich buyers

Published on Monday 3 August 2009 21:47

NATIONWIDE is to buck the mortgage market trend today by cutting the cost of more than 40 fixed rate and tracker products.

The building society's decision to trim some of its rates by up to 0.50 per cent comes at a time when the cost of mortgages is creeping upwards. But only borrowers with a deposit of 40 per cent or more will benefit from the best deals.

The new mortgages for house purchases include a two-year fixed rate at 3.98 per cent; a three-year fixed rate at 4.58 per cent; and a two-year tracker at 3.08 per cent, all limited to borrowers with at least 40 per cent deposit.

However borrowers also have to pay a reservation fee of 896 and an upfront booking fee of 99. The latter charge, not levied by Nationwide before but introduced by several other lenders in recent months, is aimed at deterring borrowers from dropping out part-way and is deducted from the final fee on completion.

Louise Cuming, head of mortgages at Moneysupermarket.com, welcomed the price cuts, but claimed the impact would be limited. "The pricing restructure doesn't help alleviate the problems facing those with small deposits – the best deals are still restricted to borrowers with significant equity in their homes," she said. "Providers must look to offer affordable deals for all borrowers including those with smaller deposits if the mortgage market is to make a full recovery."