Strategic Finance
Nationwide tracker withdrawals |
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| Written by Gary Howes | |
| Tuesday, 09 December 2008 | |
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Lender hails new rate falls - while pulling tracker mortgages - but says full cut will be passed on.
Nationwide - the UKs largest mortgage provider - has pulled its two year tracker mortgage product from sale at close of business today. The lender says customers will still benefit from the full 1% fall in the Bank of England Base Rate as announced by the Society last week.The offer to pass on the benefits is good news to Nationwide customers - good news is something in short supply for Lloyds TSB (LON:LLOY) customers who today found out that Lloyds TSB has pushed up the interest rates on mortgages that are pegged to the base rate by up to 0.4 percentage points. Lloyds TSB is the UKs fifth biggest mortgage lender, and is due to take around £5.5 billion in taxpayers' cash to boost its finances. The lender has increased the rates on its two-year trackers for new customers with a 25 per cent deposit from 2.09 percentage points above base to 2.49 per cent above base, or 4.49 per cent, with a fee of £995. Lloyds TSB has been accused of preventing new borrowers from benefiting in full from the 1 per cent cut in interest rates implemented by the Bank of England last week. Nationwide today also revealed that saving habits of UK consumers is also changing in the face of the economic slowdown. New research from Nationwide reveals there has been a distinct shift in consumers’ savings habits in November. The proportion of consumers saving regularly has increased by five percentage points from 47% to 52% on the previous month, with those saving occasionally having fallen from just under a third (31%) to a quarter (26%). The recent cuts to Base Rate on 9 October and 6 November 2008 could have helped to increase savers’ ability to put money aside as expenditure on other outgoings has fallen. (Respondents were questioned before the 1% base rate cut announced on 4 December). This change in behaviour is mirrored by people’s feelings about saving. In October just a quarter (25%) of consumers believed they were saving ‘about the right amount’. In November this figure increased to just under a third (31%) and those that think they are saving less than they need to has fallen from 60% to 56%. This move could be a result of falling mortgage payments for those on variable products as borrowers choose to save what they were spending on their loan. Similarly, as food and fuel prices have also decreased in recent weeks, consumers may feel now is the time that they have the capacity to start saving a bit more. Consumers are, however, uncertain about their savings future. A third of those questioned think they’ll be saving less than they need to in six months’ time – an increase of four percentage points (29% in October to 33% in November). |
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