Nationwide raises rates on new tracker mortgages

Nationwide has increased the mortgage interest rates payable on its tracker products, citing the effects of higher funding costs on their inability to keep rates down.

The changes, which come into force tomorrow (January 23rd), will affect new tracker mortgages taken out on both house purchases and remortgaging deals.

Examples of the new rates include the two-year no fee tracker which will now offer a mortgage interest rate of 6.08 per cent, compared to its previous 5.98 per cent, and the lifetime tracker for a mortgage which will increase from 5.84 per cent to 5.94 per cent.

"Nationwide offers a wide range of mortgages to its customers, whether they are interested in a fixed rate or a deal that tracks the Bank of England rate," explained the lender's divisional director for mortgages, Matthew Carter.

"However, the costs of funding remain high and we have found it necessary to follow other lenders who have recently increased their rates."

"All our tracker mortgages also offer the facility to switch and fix from a tracker mortgage to a fixed rate deal at any time, without incurring early repayment charges, offering borrowers extra flexibility should their personal circumstances change," he added.

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