Nationwide hikes mortgage rates

The UK's biggest building society has became the latest lender to hike its mortgage rates following the recent jump in funding costs.

Nationwide is increasing the cost of its fixed-rate deals by 0.2% from Friday.

The group blamed the move on the rises in wholesale funding costs, as well as the recent mortgage rate increases made by its rivals.

Several major lenders, including Halifax, Cheltenham & Gloucester and HSBC, have announced rate hikes in the past couple of weeks, as the money markets responded to the recent financial turmoil.

Swap rates, upon which fixed-rate mortgages are based, soared by 0.4%, although they have since fallen back by 0.35%, while the key inter-bank lending rate three-month Libor rose from a recent low of 5.7% to 6.28%.

Nationwide director Matthew Carter said: "Recent market conditions mean that we have had to make some small increases to the cost of our fixed-rate mortgages.

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'Plan remortgaging in advance'

Homeowners have been warned to plan the remortgaging of their property six months in advance by an independent broker.

According to John Charcol, those coming to the end of their fixed-rate mortgage should act sooner rather than later to secure a good deal as the mortgage market is beginning to "freeze up".

The company said that rapid deterioration in the mortgage market and the reluctance of financial institutions to lend to each other may push up prices, making affixed-rate mortgages are more tempting option.

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Pensioners could save money by remortgaging equity release

As consumers are increasingly looking at ways to curb their spending and reduce outgoings, retirees who have released equity from their home typically over the last five years or more, should be aware that they could save thousands of pounds by remortgaging to a more competitive deal, says Key Retirement Solutions.

Despite the widespread economic gloom, the equity release market continues to grow and as a result, competition between providers has increased. In turn, this has led to a dramatic fall in lifetime mortgage interest rates over the last five years; current rates stand as low as 6.09%, more than 1% lower than some of the rates available in 2003.

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