Nationwide to introduce new higher standard mortgage rate

From 30 April, anyone taking out a Nationwide mortgage will revert to a new Standard Mortgage Rate (SMR) at the end of their deal.

This new standard mortgage rate will replace the current Nationwide standard varaible rate, its base mortgage rate (BMR), the rate onto which its mortgages currently revert.

The sting is that the SMR is a lot higher than the current base mortgage rate.

Nationwide (and others, including Lloyds TSB) committed to keeping the BMR at no more than 2% above the Bank of England base rate.

With that currently at 0.5%, the BMR is at a market leading low rate of 2.5%.

The SMR however is not bound by this Nationwide commitment and it is currently 3.99%.

Mortgage director at Nationwide, Andy McQueen, said ‘We are currently in a very low interest rate environment which can be challenging when balancing the needs of both our savers and our borrowers.’

He added ‘The new SMR will provide us with more pricing flexibility, something which is essential in helping us to offer our savers more attractive products in the future.’

Those with Nationwide mortgages already on the BMR will stay on that rate unless they remortgage.

Equally any with Nationwide mortgage deals taken out before 30 April will revert to the BMR when their deal comes to an end.