comments on Nationwide’s u-turn

Nov. 29, 2006 – New and existing customers will be offered the same products when they remortgage, but customers who plan to buy a home will be able to choose from a new range of mortgage products.

The change means that if you’re getting a mortgage to buy a home then you will be offered products with different interest rates and fees than if you are remortgaging. However, existing customer will be offered the same products that a new customer is offered. In other words, if you are remortgaging, you’ll be offered the same deal as a new customer who is remortgaging.

David Kuo, Head of Personal Finance at says: ”It is unfortunate that a lender who has made a point of offering new and existing customers the same product has chosen to backtrack on its pledge, albeit slightly.

“However, it is not unusual for a lender to respond to market forces by tweaking its product offerings. That said, the move by Nationwide may be indicative of more subtle changes to come in the mortgage market.

“Over time, higher arrangement fees and closing charges may make it more difficult for borrowers to switch lenders. Consequently, rate tarts may find it increasingly more difficult to play off one lender against another.

“For now, the mortgage market is still highly competitive, and borrowers still need to shop around for the best deals. Additionally, Nationwide’s move underlines the fact that a lender’s loyalty is to itself, and borrowers need to look out for themselves.”


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