Nationwide is to slash the reservation fee on its five and 10-year fixed rate mortgages later this week.
The fees are dropping from 389 to 199 to encourage homeowners to fix heir monthly mortgage payments for longer.
Mortgage holders can benefit from taking a fixed rate mortgage over a longer term. They can plan financially for a longer period of time and there is less inconvenience to them, as they do not have to change their mortgage so frequently. The customer will incur fewer arrangement fees than if they changed their mortgage more regularly.
From tomorrow Nationwide’s valuation fees for homebuyers will be increased but remain lower than those of its key competitors. These fees have not been changed for the last 15 months.
Steve Clode, marketing director at Nationwide, says: “Fixed rate mortgages are becoming increasingly popular as people want to manage their finances more effectively and budget for the long-term.
“We hope by cutting the cost of our reservation fees on five and 10-year fixed rates, more people will choose to fix their payments for longer.
“Already more people are choosing fixed rate mortgages and they are also choosing to fix their payments over a longer period. We see this as an indication that today’s borrowers are wanting to plan for tomorrow.”
Nationwide’s mortgages are fully flexible and the reservation fee can either be paid upfront, added to the loan or a higher rate of interest can be taken if no fee is paid.