Mortgage U-turn at Nationwide

Nationwide BS has done a U-turn on its policy of offering all mortgages to all customers. The UK's biggest building society will now have one set of mortgages for customers moving home or buying for the first time, and a separate set for those who are remortgaging.

In general, rates for customers buying a home will be lower than for those remortgaging -- but those already with Nationwide will have the 99 remortgage administration fee waived.

Melanie Bien, associate director of mortgage brokers Savills, says: "This fee reduction is a token gesture. Nationwide's products remain competitive, but this move is a real shame. Nationwide made a principled stand, promising that no one would receive preferential rates. This guarantee no longer stands."

From December 1, first-time buyers and home-movers borrowing up to 90 pc of the property price will pay 4.98 pc on Nationwide's two-year fixed rate, while remortgagors or those taking out a further advance will pay 5.08 pc.

Home-movers would pay a 499 fee, while remortgagors would pay 399, but this 100 difference would be cancelled out in less than one year by the higher mortgage repayments.

Nationwide has always been scathing of rival mortgage companies that charge different rates for different customers.

A spokeswoman for Nationwide says it stands by its criticism of those who charge existing customers more than new borrowers. She said: "What we are doing is fair to all customers. Everybody who has the same circumstances will be offered the same product, regardless of whether they are a new or existing borrower."