The society will maintain its base mortgage rate, currently 2.5% for existing customers, but any new customers whose mortgages come to an end will revert to its new rate, which does not track the Bank of England base rate.
Nationwide has always pledged that customers on its BMR would pay no more than 2% above the BoE base rate.
Nationwide’s BMR is one of the lowest in the market but the society says it has to make the change to give it more flexibility with its products.
A spokeswoman for Nationwide says: “The new SMR provides us with greater flexibility. It doesn’t have the same guarantee as the BMR but it allows us more scope to offer better products.”