The mortgage rate war between two of the UK's top lenders has heated up with Nationwide chief executive Brian Davis attacking his Halifax counterpart James Crosby for allegedly making misleading claims.
In a letter sent by Davis to Halifax chief executive Crosby last Friday, Davis accuses Halifax of wrongly claiming its mortgages are cheaper than Nationwide's following recent rate cuts.
Davis is incensed by a document which he claims was circulated to Halifax staff and “other audiences” saying the bank's introduction of daily interest payments made its loans cheaper than Nationwide's over the full term.
The letter comes as Nationwide is believed to have held a private meeting with rival lenders at last Friday's Council of Mortgage Lenders annual lunch in a bid to justify its decision to cut its mortgage rate dramatically. Nationwide announced it was slashing its standard variable rate for new and existing borrowers last week to 6.49 per cent from 7.09 per cent.
Halifax hit back the following day by cutting its variable rate to 6.75 per cent from 7.5 per cent for all borrowers but borrowers must contact Halifax to request the change.
Davis's letter asks why Halifax is not automatically moving its existing customers on to the new lower rate, accusing it of relying on borrowers' inertia to protect its profits.
He is also angry at “patently untrue” claims by Halifax that it led the way in getting cash machine charges withdrawn, saying it was Nationwide that first challenged banks about unfair charges.
Davis says: “I would ask the Halifax to provide its audiences, the media, the public, staff and intermediaries with correct information and to refrain from making misleading claims.”
A Halifax spokesman says: “We stand by the statements we have made and are not changing these views.”