For the first time, Britain’s biggest building society decided to pre-empt an increase in core interest rates.
Markets are pricing in a 90% chance of the Bank of England raising the base rate from 0.25% to 0.5% in November – it will be the first time in a decade interest rates have increased.
A spokeswoman for Nationwide told Mortgage Solutions it wanted to give its customers certainty for the future, amid growing speculation that rates would rise.
The lender has confirmed that variable rate mortgages, including its Standard Variable Rate (SVR) will go up by 0.25% from December 1, if the Bank of England moves as expected and raises the base rate.
As homeowners race to lock into deals, Nationwide has also cut fixed rates for existing customers by up to 0.5%.
Chris Rhodes, executive director of products and propositions, said: “With a Bank Rate rise anticipated, we have decided to take early steps to offer improved mortgage products, while at the same time announcing the impact on members’ mortgages and savings rates.”
Wait and see
Other lenders opted to stay quiet ahead of the Bank of England’s November interest rate decision.
A spokeswoman for Lloyds and Halifax said a base rate rise would form an ongoing review of mortgage rates.
HSBC, Aldermore and Yorkshire Building Society declined to reveal how a change in base rate would affect their product rates.