The Nationwide Insurance company has announced that if the Bank of England lifts it’s base rate to 0.05% on Thursday that they will increase the variable rates for mortgages by 0.25%. If Nationwide raises its rates that could affect almost 5 million people that are on a variable rate mortgage. Although all is not lost because some people may be able to bypass the raise, if some lenders decide to absorb some or maybe even all the base rate in hopes of encouraging their customers to stay.
Key Takeaways:
- Nationwide is currently one of the biggest mortgage lenders in the UK. Many other banks and building societies will follow the lead of Nationwide.
- They will pass on the interest rate rise to mortgage customers. That is an unpopular decision and one being widely discussed among leading traders in the UK.
- Many other banks and building societies could take note and follow suit. They may reprice their mortgage products and offer a new take on these deals.
“Brian Murphy, head of lending at the broker Mortgage Advice Bureau, said: “The announcement by Nationwide today, who are one of the UK’s biggest mortgage lenders, isn’t a surprise and is highly likely to be the route that other banks and building societies will follow when it comes to repricing their products in the event that a rate rise does occur.”
Read more: https://www.theguardian.com/money/2017/oct/30/nationwide-interest-rate-rise-to-mortgage-customers