Nationwide fixed rate mortgages are increased by 0.3%.

Nationwide has increased its fixed rate mortgage range by 0.3% for new customers.

As well as fixed rate increases tracker mortgages are also now more expensive. Tracker rates have not risen by as much as fixed rates but they now cost 0.2% more.

Both swap rates and the Libor have fallen and so why is Nationwide increasing its rates?

Some in the market think that the rate increase is an effort to control the increase in demand that Nationwide has experienced ever since cutting its rates at the beginning of summer.

Many feel it is an unusual time to be introducing a rate increase when funding costs are falling, however Nationwide is currently believed to be experiencing mortgage application processing delays and needs to act to cut processing time.

By raising its mortgages rates demand may fall which means Nationwide will have the opportunity to catch up.

Early in the summer Nationwide released various cheap fixed rate mortgages, and due to high demand for its cheap rate products its application processing time increased. The lender's service level agreement states mortgage applications will be processed in 14 days, however currently an application is taking on average 20 days to be processed.

Nationwide believes by increasing its rates for a time, it will lower demand and clear its backlog.

Not all rates are to rise, while new customers will have to pay slightly higher rates existing customers looking to amend their fixed rate mortgage deal or remortgage, will be offered a loyalty rate reduction of 0.1%.

If you are looking for a cheap fixed rate mortgage call Deal Direct.

Call one of our advisers for a quote.