Nationwide passes on full rate cut to Tracker customers

by Richard Kilner

Story link: Nationwide passes on full rate cut to Tracker customers

In the wake of the Bank of England’s decision to reduce interest rates by 100 basis points the Executive Committee of Nationwide has chosen not to enforce the 2.75% floor on its Tracker mortgage products and its Base Mortgage Rate.

The Executive Committee met to discuss the matter and elected not to enforce the floor in order to help aid borrowers during the severe economic turbulence presently underway in the UK.

As a result of this choice all Tracker mortgage customers with Nationwide will enjoy the full 1% cut, equivalent to £300m over the full course of the Tracker products’ lifespans.

Furthermore, Nationwide Building Society has stated it is to cut its Base Mortgage Rate (BMR) by 0.69% with effect from 1 January 2009, meaning the BMR will stand at 4%.

According to Nationwide Building Society this would mean a saving of around £40 per month for a typical customer with a £100,000 mortgage.

The building society has also given a guarantee that the BMR will never be above 2% the official interest rate, meaning further cuts will be passed on in their entirety.