New lowest 2.44% mortgage rate available (only to existing customers though)
Everyone knows that new customers get the best deals. Even leaving aside the prospect of cashback, shopping around will generally get you a better deal than just staying put. Unless you are a Nationwide customer looking for a new mortgage that is.
Nationwide have always been big on flashing their building society credentials, that is, they have no avaricious shareholders always demanding more profits. But now they are putting their money where their mouth is with their loyalty rate mortgages that are only for existing customers.
The loyalty rate initiative compares Nationwide rates each week with high street rivals and aims to match or beat the market for their existing customers who are coming to the end of their deals.
Nationwide is now offering a five-year fix at a record low of 2.44% with a £999 fee. Existing customers can also switch from a two to a five-year fix providing they have enough equity. This rate, the lowest currently available, is in response to HSBC’s announcement of a 2.48% rate last week, which also carries a £999 fee. The last time we saw a fix this low was August 2013 with Yorkshire Bank.
However, even if you are eligible for this bottom-beating rate, you might actually be better going for a slightly higher one.
On the lowest 2.44% 25-year £150,000 mortgage would cost around £668 a month and £41,103 over five years, after adding the £999 fee. If you went for the fee-free version, a five-year fix at 2.64% on the same balance and term, it would cost around £683 a month but would be slightly cheaper overall at £41,012 over five years.
Either way, it's an interesting prospect to think that the tide is turning and that businesses are more concerned with looking after their current customers, rather than chasing after new ones.