Nationwide highlights remortgage benefits

Nationwide has said that a quarter of a million borrowers are set to suffer when their two year fixed-rate deals mature, and has suggested that remortgaging could be one way of dealing with such problems.

However, with interest rates having risen so sharply over the past year, even remortgaging to another fixed-rate deal is likely to result in higher payments, the lender has advised.

Nonetheless, Nationwide says that seeking a superior deal is a better option than allowing current fixes to mature into variable rate products, as these will result in rate increases of over three per cent.

"For some borrowers it will come as a quite a fright to see their mortgage payments increase dramatically," commented Nationwide director of mortgages Matthew Carter.

"To absorb some of this shock, borrowers need to consider remortgaging as soon as their deal ends, or beforehand if their lender allows it.

"Those who prefer to avoid the unexpected may be thinking about fixing for a longer period," Mr Carter added.

The Bank of England is likely to give borrowers a reprieve this week when it sets interest rates for September, with almost all market analysts expecting rates to be frozen at 5.75 per cent.


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