Building society hikes tracker rate

Nationwide Building Society has announced it is to raise the interest rates on its tracker mortgages for new customers.

The lowest increase is by 0.5 per cent on its two-year tracker, while the largest is 0.15 per cent on its lifetime tracker, taking the rate from 5.74 per cent to 5.89 per cent.

Nationwide blamed the move on the credit crunch, which has led to higher interbank (Libor) lending rates.

Divisional mortgage director Matthew Carter said: "The costs of funding remain high and we have found it necessary to follow other lenders who have recently increased their rates."

The news comes following comments yesterday by the Royal Institution of Chartered Surveyors that "The tougher lending environment is likely to be particularly problematic for first-time buyers" with less attractive deals available in the coming months.

News of the higher rates may prompt some looking to obtain their own home to consider the self build option.


© Adfero Ltd