Nationwide has launched a price promise to make sure existing borrowers stay with the society.
As of last week, Nationwide will compare its mortgage rates for existing residential mortgage customers looking for a new deal against the remortgage rates of its top six high street competitors – NatWest/RBS, Halifax, Santander, HSBC and Lloyds.
Every Friday the society will shop around for its mortgage customers. If any of the competitors has comparable remortgage rates that are lower than its own, Nationwide will lower its rates the following Wednesday.
The scheme is only available to existing remortgage customers who are looking to switch deal.
Nationwide divisional director of mortgages and savings Richard Napier says: “Following our recent extensive reductions across our mortgage range, Nationwide’s mortgage deals for existing customers are already extremely competitive. With loyalty rate mortgages, we are taking that a step further.
”We are constantly reviewing the market so that our existing mortgage customers can be confident our rates compare favourably against those of our competitors. We are doing the work for them by checking the rates of the top six lenders to make sure that we offer the best rates.”
London & Country director Pat Bunton says the offer shows lenders are not using properly the transitional arrangements that were written into the Mortgage Market Review.
The transitional rules allow lenders to waive affordability checks and interest-only rules for borrowers who may be trapped under the new rules as long as the customer does not wish to borrow more money or there is no “material impact” on affordability. They apply to borrowers staying with their current lender and those who want to switch to a new lender.
Bunton says: “What this is highlighting is that lenders are going out of their way to look after their existing customers but every step they make to do that exposes the flaw that they are not doing the same for new customers.”