Nationwide hikes SVRs on specialist products

25 January 2010 | By Natalie Thomas

Nationwide is to increase the SVR on residential and self-cert mortgages with The Mortgage Works and increase the SVR for some UCB Homeloans customers.

From February 1 borrowers on residential and self-cert mortgages with TMW will see their SVR rise by 0.5%.

Buy-to-let borrowers with UCB Homeloans will also see their SVR increase by 0.3%.

Nationwide operates a range of SVRs on products taken out through its specialist lending arms TMW and UCB Homeloans depending on when products were taken out.

For TMW, a typical SVR would be around 4.99% for buy-to-let cases and 5.19% for residential loans.

UCB Homeloans also work to similar SVR levels, but currently operates approximately 15 different SVR rates.

A spokesman for Nationwide says: “Particularly in the specialist marketplace, the rates for specialist products tend to be higher than prime, and there has been more movement in that area.

“It is a symptom of the market that we are having to review these rates. Other lenders have also done this and we feel this is an appropriate action to take.”

The move comes one week after it emerged that Skipton Building Society is removing the ceiling on its SVR which pledged that borrowers would never have to pay more than 3% over Bank of England base rate.

Skipton’s SVR is rising to 4.95% with effect from March 1.

Skipton’s decision has raised concerns from some commentators that more building societies are likely to follow suit.

Some have even called into question whether the building society funding model is sustainable, as mutuals increase their revert rates to try and contend with more competitive savings rates and expensive wholesale funding.

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Readers' comments (19)

Tom Cleary | 25 Jan 2010 1:13 pm
Is this the first step to Natiownide increasing their SVR on the entire mortgage book? There would be some massive re-mortgage potential if they do...
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mortgagemicroscope | 25 Jan 2010 1:21 pm
Their SVR on mainstream residential deals must be under review....we had a BDM state that at 2.5% it was 'crippling them'

Discretionary SVR's were always under threat before BoE Trackers. Could be better for remortgage opportunities but are there competitive products to move into ?
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Geoffrey Chaucer | 25 Jan 2010 1:26 pm
Another lender comes to the conclusion they can increase their top line by shafting the minority. They are increasing their rates because they can, not because they have to.

TCF is an absolute joke. just another form of beaurocracy. The idea is sound but lenders dont give two hoots.

Lenders are untrustworthy in the eyes of the consumer.

Unfortunately for the consumer other building societies are sure to follow suit and once the round of specialist svr rises are done, then you can be sure that mainstream will follow.

The british public certainly get the short straw when it comes to financial services.
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Anonymous | 25 Jan 2010 1:41 pm
This is an appalling way to treat their customers, bank base rate has remained static and yet they increase their SVR. There is no justification for this other than to prop up their residential SVR which is too low. Why should the BTL clients be treated diffrently and be subsidising others? How can they be treating customers fairly when some borrowers are being charged higher SVR's than other?
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Anonymous | 25 Jan 2010 1:53 pm
This would beg the question where do these clients go to?

The SVR's are being increased on the specialist side of the operation namely the self cert.

With these products no longer available I would suspect there will be literally a few million households across the UK who will be at the mercy of the banking and financial system now and with no where to go.

I think there will be more than a few brokers out there who will agree that at one point a large percentage of mortgages completed on were 'fast track' and self cert. Unless the FSA decides to relent on its new founded criteria and stance with regards to self cert then these clients will be stuck in a mortgage rut with no where to go.

As brokers there is very little or indeed anything we can do for these clients given the current climate.

I believe we are in for some interesting times ahead.
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John Tidswell | 25 Jan 2010 2:02 pm
What beggers belief is that the FSA, the Tresury and the Government are allowing them to do this.

Then again they all sat there watching the Banks go bust without doing anything so perhaps we shouldn't be surprised.
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Mark | 25 Jan 2010 2:37 pm
More to the point is why Nationwide unilaterally extended its ridiculous BBR+2% BMR to the Cheshire and Derbyshire members, whilst not doing so for Dunfermline members. Presumably they were too dim to think of the idea of charging a different rate when they did the first two acquisitions? And now the self-certs (and all Nationwide investors) are paying the cost.
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Anonymous | 25 Jan 2010 3:42 pm
They're doing it because they can get away with it. Whatever happenend to looking after their members interests? The recent announcements by Nationwide and Skipton suggest that there is no meaningful difference between banks and building societies when it comes to looking after their customers. I suspect that this will not be the end of this story!
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Anonymous | 25 Jan 2010 4:44 pm
Understand the building society model! Who took base rate to an all time low? Could you run a business today - in this interest rate environment - lending at 2.5% and having to pay up to 5% plus for your funding lines??!! These institutions have to borrow short and lend long, the BBR is not relevant. Variable rate mortgages - the clue is the the title. GET REAL!!
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William Smith | 25 Jan 2010 6:46 pm
I'm with Geoffrey, is it TCF to increase the SVR to some of their mortgage book, arguably the more vulnerable specialist side. Then on the other hand not increase the SVR on their mainstream book?
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