Nationwide to push up bills for mortgages customers by 0.25% if interest rates rise on Thursday
MORTGAGE holders with Nationwide will see their payments rise if the Bank of England hikes interest rates this week.
The UK's largest building society announced it will pass the widely-expected 0.25 per cent rise onto customers on its variable rate deals.
The lender said both its Base Mortage Rate and Standard Mortgage Rate deals would remain competitive at 2.5 per cent and 3.99 per cent, following the assumed rise.
Based on a £150,000 mortgage over 20 years, customers on its Base Rate Mortgage will be paying an extra £18 a month - £216 a year.
On the same basis, those on the Standard Mortgage deal will pay an extra £19 a month - £228 a year.
The Bank of England will announce on Thursday whether it is to raise interest rates for the first time in more than 10 years, amid fears over consumer debt and rising inflation.
Many banks and building societies are expected to make a similar move to Nationwide, if the rise is confirmed.
Base rate was cut from 0.5 per cent to its current 0.25 per cent level in the aftermath of the EU referendum last August.
But it wasn't all bad news for borrowers.
The lender said it was going to be reducing its fixed mortgage deals by up to 0.50 per cent, starting at 1.29 per cent for a two-year fix.
It's also going to pass on the expected 0.25 per cent increase to savers who received the same cut on their savings accounts last August.
HOME LOAN NEARLY HALF OF MORTGAGE OWNERS HAVE NEVER SEEN A RATE RISE
Mortgage expert David Hollingworth said: "Nationwide has been very upfront about what its variable rate borrowers can expect if base rate does rise but most will not declare their hand until after any announcement.
"But borrowers would typically expect to see an increase in standard variable rate when base rate rises.
"It has also taken the chance to improve the rates on offer to new and existing borrowers and this only serves to highlight that borrowers on a standard variable rate should be shopping around for a better rate.
"The best fixed-rates will not only offer a substantial savings but also give certainty that payments won’t rise, even if there are further rises,"
Chris Rhodes, of the building society, said: “With a rise anticipated, we have decided to take early steps to offer improved mortgage products, while at the same time announcing the impact on members’ mortgages and savings rates.
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