Another lender in the UK has joined the pool of other lenders that have pushed up mortgage interest rates this month even though there was no rise in interest rates from the Bank of England. Nationwide has stated that its tracker rates will be rising by between 0.05% and 0.15% for new borrowers.
The tracker rate is supposed to follow movements in the base rate, but despite the interest rate cut in December the Nationwide, which recently won a Moneysuperket.com poll as most trusted bank or building society, has put up tracker rate twice since November.
Nationwide mortgage director Matthew Carter stated: “The costs of funding from both the wholesale and retail markets have increased, and we have found it necessary to follow other lenders who have recently increased their rates. We have had to reflect these increased costs in the pricing of our tracker mortgages.”
Other lenders that have raised their tracker rates since the start of the year include Yorkshire Bank, the Bradford and Bingley, and the Woolwich.
One mortgage broker stated: “It’s a question of how competitive lenders want to be - or can afford to be. Lenders are facing the ongoing problem of a lack of stability in terms of funding. We shouldn’t expect to see trackers becoming much cheaper in the near future until this uncertainty has worked its way through the market.”
However, an official from a financial comparison website said: “Although tracker rates are creeping up, with the high level of uncertainty in the market at present and with the potential of further rate cuts to come this year, these types of mortgages are still worth considering.”
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