Nationwide Building Society imposes restrictions on some of its best mortgage deals

The UK’s second largest mortgage lender, Nationwide Building Society, has increased its interest rates on mortgages for those borrowing 75% or more of the property’s value.

This is a direct result of a slower housing market, higher mortgage funding costs and a general inclination for lenders to distance themselves from ‘riskier’ loans according to the Daily Telegraph, the Times and the Financial Times.

Nationwide, like a number of lenders, is showing a reluctance to lend higher ‘loan-to-values’ and now offer the most competitive rates or deals to those customers who will borrow 75% or less of a property’s value. Last week they raised the interest rate on loans above the 75% threshold by 0.2% points.

Whilst they are aware this move may cost them some customers, their spokesperson maintains,”What we would like to do is continue to lend strongly but with an eye on quality. If the only way to do that is to accept a smaller market share then we will.”

When asked for his opinion on the move, Sean Gardner, chief executive of moneyexpert.com said, ” It is a case of the less you need to borrow, the better deal you are going to be offered by lenders now.”