Nationwide cuts rates across the range

Amanda Jarvis

February 14, 2003

This move follows the recent announcement that the Bank of England base rate has been cut. In addition, lowest ever fixed rates and a new range of lower tracker rates are being introduced.

Nationwide's BMR will be the lowest rate paid by the majority of its existing borrowers since June 1955 – almost 50 years ago – and will remain around one percent lower than the standard variable rates of most other major high street lenders. Based on a £60,000 repayment mortgage, borrowers with Nationwide will save £426.72 over just one year by having their mortgage on the Nationwide BMR of 4.64% rather than the Halifax variable rate of 5.65% (see table 1).

Table 1: Savings to be made on BMR v’s SVRs of major lenders

Lender SVR / BMR Monthly payment Monthly saving with NBS Annual saving with NBS Saving over 7 years with NBS
Nationwide (NBS) 4.64% £338.29 – – –
Halifax 5.65% £373.85 £35.56 £426.72 £2,987.04
Abbey National 5.79% £378.92 £40.63 £487.56 £3,412.92
Northern Rock 5.69% £375.30 £37.01 £444.12 £3,108.84
Based on a £60,000 interest only mortgage at 75% loan to value. Correct as at 14 February 2003.

Nationwide’s lowest ever fixed rate mortgages, which will be available from 18 February, are:

· 2 year fixed rate available from 3.99% (decreased by 0.30%)
· 3 year fixed rate available from 4.29% (decreased by 0.30%)
· 5 year fixed rate available from 4.49% (decreased by 0.30%)

Nationwide is also launching a new range of tracker mortgages, which will be available from 18 February:

· 2 year tracker rates available from 3.74% (Base Rate minus 0.01%)
· 3 year tracker rates available from 3.84% (Base Rate plus 0.09%)

Nationwide's savings rates are being reviewed and an announcement will be made in due course.

Stuart Bernau, Nationwide executive director, said: “Our variable rate remains around one percent below our principal competitors and is supported by a very competitive range of fixed and tracker rates.

“Nationwide firmly believes fairness can work in the mortgage market. We have a competitive product range, our products remain available to both new and existing borrowers and are subject to daily interest, no MIG premiums and no extended tie-ins.”

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