Rate rise expected today as Nationwide cuts fixed rates

Some homeowners on tracker mortgages face higher payments as lenders move ahead of today’s interest rate decision – but new Nationwide fixed-rate customers will pay less.

The Bank of England is widely expected to increase its Bank Rate from 3.75% today, for the first time in three years.

Nationwide raised a small range of tracker rates by up to 0.10% yesterday.

At the same time, it cut fixed rates by up to 0.15% across first-time buyer, home mover, existing customer and remortgage products.

Current market conditions are giving us the opportunity to reduce fixed mortgage rates across our range.”

Virgin Money also cut yesterday, with two-year purchase fixes down by up to 0.12% and five-year fixes down by up to 0.13%.

Carlo Pileggi, (pictured), Nationwide’s head of mortgage products, says: “Current market conditions are giving us the opportunity to reduce fixed mortgage rates across our range.

“We’re making cuts across the range to support all types of borrowers, whether they’re buying their first home, moving home or looking to remortgage.”

Rate rises

Samuel Fuller, director of Financial Markets Online, says a single rise may not be the end of it.

He suggests inflation means the Bank of England is “all but certain” to announce its first increase in interest rates for three years.

He says: “Mortgage lenders have been ratcheting up their fixed interest rates in recent weeks as the swap markets, which track future rate expectations, imply that the Bank could raise rates multiple times over the next year.

“The thousands of homeowners who are due to remortgage in coming months could face an even greater interest rate shock.”