Nationwide Building Society is reducing the standard variable rate for around 7,800 customers of Dunfermline Building Society.
The building society, which bought Dunfermline in March 2009 after it suffered losses of £26m, is reducing the SVR for Dunfermline customers from 5.19 per cent to 3.99 per cent in line with Nationwide’s SVR.
Customers in England, Scotland, and Northern Ireland on the current SVR will receive letters this month detailing the changes.
A customer on the current Dunfermline SVR with a £100,000 mortgage making payments on a capital and interest basis is paying £595.71 a month. Based on the new SVR, customers will see their mortgage payments fall to £527.28.
Nationwide head of mortgages Tracie Pearce says: “Dunfermline’s customers will benefit from a lower mortgage rate. This will make a big difference to customers who will see a significant drop in their monthly mortgage payment.
“As we move towards bringing all Dunfermline, Cheshire and Derbyshire Building Society customers together within the Nationwide Building Society, we are in a position to pass on the benefit of a lower SVR to Dunfermline’s borrowers.”
Cheshire and Derbyshire, which merged with Nationwide in 2008, already have a 3.99 per cent SVR.
Coreco director Andrew Montlake says: “This will obviously be a popular move and well done to Nationwide for doing this. In a world where we are seeing other lenders like Bank of Ireland and West Bromwich increasing tracker rates, this is a welcome move and I hope it will be replicated elsewhere.”