Fee increases at Nationwide

Nationwide is increasing the interest rate by 1.5% for those wishing to rent out their home for more than six months.

The increase comes as the building society introduces a raft of other new fees for homeowners to come into effect on September 1.

It is introducing a £50 fee on top of the interest rate rise for those wanting to rent out their property.

It is also introducing a £20 fee for those changing the term of the loan and a £50 fee for those switching from interest only and vice versa.

However the lender says the extra £50 charge will not be applied to those who are in financial difficulty and have no other option but to switch to interest only.

A spokeswoman for Nationwide says the increases have put it in line with other lenders. She says the society looked at areas of the business where it was having to absorb the extra costs.

She says: “We have written to all of our customers and informed them about the changes. 

“We are allowing borrowers to rent their property free of charge for six months and up until now we have been absorbing the costs of homeowners that wanted to extend this.”

Aaron Strutt, broker with Trinity Financial Group, says: “Nationwide appears to be wanting to keep people of its SVR and by implementing the new fees and increase in rates it obviously view this as the best way to generate extra income.”