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Product matters

Many brokers are still favouring low rates and tracker products continue to have wide appeal so the news that Nationwide is launching even lower rates was well timed.

Nationwide’s new range of competitive fixed rates at 4.95 per cent for two years and 5.09 per cent for either three, five or 10 years are sensibly priced. These products offer a range of flexible features such as the ability to overpay (with a maximum of 500 a month), take a payment holiday, underpay or apply for additional borrowing facility.

The new deals will be available to new and existing borrowers for up to 95 per cent loan to value, with no higher lending charge. While a barrier to some first-timers, Nationwide’s 389 booking fee is typical of the market.

The deals compare well with Northern Rock’s 5.19 per cent fixed for three years, particularly given that Rock has a maximum loan to value of 85 per cent and an arrangement fee of 695. Nationwide also scores well against Halifax’s 5.29 per cent deal for two years with its 399 arrangement fee.

Turning to the tracker product, Nationwide’s rates have been available since January and the 4.79 per cent for two years product available for up to 90 per cent LTV is already popular. The booking fee of 389 is an unwelcome feature but few lenders can get close to this overall product.

On balance, Nationwide is right to expect a significant volume of business on its new deals which are probably sector leading, particularly given the additional benefit of the Society’s flexible mortgage features.

Rob Clifford is chief executive of Mortgage Force

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