Nationwide fires salvo in mortgage price war

Nationwide today fired the next salvo in the mortgage price war with the launch of a mortgage challenge it says can’t be beaten by Halifax, Abbey, C&G, Woolwich, HSBC, NatWest and Northern Rock – more than 50% of the mortgage market.

Borrowers with any lender who are looking to remortgage are invited to take the challenge, and if Nationwide cannot match or lower monthly mortgage payments from the seven named lenders, with either a better fixed or tracker rate deal, Nationwide will pay out 150.

Winners in the mortgage price war include those who reach the end of one deal and switch to another, those who are currently on a SVR and move onto a better deal, and those who are currently on a high SVR and move onto a better standard rate, like Nationwide’s BMR.

Nationwide estimates that a Halifax customer with a typical mortgage of 100,000, currently paying its SVR of 6.50% would save over 1,500 a year by moving to Nationwide’s two year fixed rate mortgage at 4.39%.

Losers in the mortgage price war include the thousands of borrowers who have come to the end of a mortgage deal and stay on a high SVR, and the hundreds of thousands of borrowers already paying a high SVR who do nothing.

For example, borrowers with a 100,000 mortgage could save more than 11,000 over the lifetime of their mortgage, or about 450 a year by switching from a 6.50% SVR to Nationwide’s 5.89% Base Mortgage Rate.

Unlike other lenders’ challenges, Nationwide’s mortgage challenge is open to all remortgagers – those coming to the end of a deal as well as those on SVR.

It challenges seven named lenders to offer borrowers a better deal than Nationwide.

Stuart Bernau, executive director of Nationwide, says: “In a mortgage price war, the winners are those who look for a competitive rate with low fees and charges and a lender who treats them fairly at the and of the deal with Nationwide, you don’t have to sacrifice one for the other.

“The losers are the borrowers who continue to pay over the odds by remaining on some lenders’ uncompetitive SVRs.

“With savings of up to 1,500 a year to be made on a 100,000 mortgage, we’re confident our new mortgage challenge will lead many people to look at their mortgage and do something about it.”