Nationwide customers will no longer be offered a fee-free remortgage, as banks across the board hike their lending costs in response to the financial market turmoil.
Nationwide traditionally waives the arrangement fee for existing customers on any deal with a £599 fee, but as of 3 October, they will offer a £300 discount instead, meaning customers will need to pay £299.
This is merely the latest in a long line of bad news for UK homeowners: Last week, nine lenders have either withdrawn part of their product range or hiked their rates by as much as 0.3%. And the trend has actually gathered this week. According to Moneyfacts, Monday saw one of the largest declines in mortgage products ever seen in a day, with 11.4% of products being culled.
At the start of Monday there were 3,914 mortgage products on the market, today there are just 3,469.
Compare tracker mortgages
Less choice, more cost
“It has taken only a matter of days for the impact of last week’s financial crisis to feed through to borrowers, with a double whammy of higher interest rates and tighter lending requirements,” says Louise Cuming, head of mortgages at price comparison site moneysupermarket.com.
"We have seen a flurry of activity as lenders withdraw competitive products, many of which weren't immediately replaced, and those that were now carrying much higher rates.
“HSBC has tried to help the situation by making some concessions and reducing fees, but for the average mortgage borrower, the net effect will be an increased cost. Only Scottish Widows Bank has bucked the trend with some welcome rate reductions.”
Compare fixed rate mortgages
Should start returning to normality
Mortgage rates were actually falling before the chaos at HBOS, Bradford & Bingley and Lehman Brothers erupted.
Now, with prices on the upward trend once more, it can be tempting to try and lock into a deal now in the hopes of avoiding any further increases. However, there is a good chance the current situation is only a blip in the interest rate downtrend.
So if your mortgage deal isn’t due to expire in the next couple of months, you could be well served by sitting tight until the current mortgage storm blows over. Read more about this here.
Compare tracker mortgages
