You are here: Home - News -

Halifax and Nationwide compensate borrowers

  • 14/03/2002
  • 0
Both Halifax and Nationwide are to compensate borrowers who were stuck on a higher standard variable...

Both Halifax and Nationwide are to compensate borrowers who were stuck on a higher standard variable rate (SVR) when a lower rate for new borrowers was introduced last spring.

The announcements follow investigations by the Financial Ombudsman into dual pricing, after borrowers who were tied into special deals complained they were being treated unfairly as they could not move onto the lower rate.

Halifax announced last month that it would be scrapping its lower rate, meaning all customers are now priced on its higher SVR. The lender has now announced it will be writing to 10,000 borrowers who will be refunded, on average, £500, including £150 for any inconvenience suffered. However, the refund will only apply to borrowers on a capped or discounted mortgage who asked to be transferred to the lower rate between 1 March 2001 and 31 January 2002.

Nationwide, on the other hand, said it will bring all customers in line with its lower base mortgage rate (BMR), scrapping its old, higher SVR. In addition, Nationwide will automatically reimburse all borrowers who have been stuck to the higher SVR, by a reduction in their mortgage balance. The reimbursement will be based on the 0.5% difference between interest charged at the SVR and interest charged at the BMR between 1 March 2001 and 31 March 2002.

Philip Williamson, Nationwide’s chief executive, said other lenders should follow its lead and automatically reimburse all affected borrowers.

‘Unlike some of our competitors, we do not believe it is right to force borrowers in a similar position to go to the Ombuds-man. It was already our stated intention to move all our existing borrowers onto our base mortgage rate. It makes sense to bring forward this plan and ensure all our borrowers are treated as though they have had the base mortgage rate from day one,’ he said.


There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.


Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.


Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.


Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
  • RT @robjupp: Great day yesterday for donations to @MortSleepOut. With Gift Aid, we are now close to £17,000. It would be great to get to £2…

Read previous post:
As easy as…

With so much jargon used in the non-conforming market, brokers will need to give borrowers guidance to help them through...