Nationwide cuts fixed rate early redemption charges

Change will benefit all customers taking a new fixed rate mortgage

08 October 2014

Nationwide Building Society is to apply a reducing scale approach to all fixed rate mortgages taken out from Wednesday 8 October, where customers need to redeem their loan, or overpay by more than 10% of the initial balance per year, before the end of the fixed rate period.

The new structure, where charges reduce each year, means that customers who need to move towards the end of their fixed rate mortgage period will now pay less to exit. Previously this early redemption charge would have remained at the same level throughout the fixed rate period.

The scale for redeeming the loan before the end of the fixed rate period will be consistent across all existing two, three, four and five year fixed rate mortgages, lowering the potential cost to 1% per year (or part year) remaining on the customer’s deal.


The scale for redeeming the loan before the end of the fixed rate period
  Year 1 Year 2 Year 3 Year 4 Year 5
2 year fixed 2% 1%      
3 year fixed 3% 2% 1%    
4 year fixed 4% 3% 2% 1%  
5 year fixed 5% 4% 3% 2% 1%

Richard Napier, Nationwide’s Director of Mortgages and Savings commented; “Adopting this new more flexible approach across all our fixed rate mortgages clearly demonstrates the tangible difference our mutuality and our way of doing business can deliver.”

Notes to Editors:

Key features of Nationwide’s fixed and tracker mortgage product range for new applications

1. Flexibility:

  • Overpayments (maximum of 10% of the initial amount borrowed per annum where an ERC applies to the product. Where a product is not subject to an ERC, there is no maximum overpayment allowance).
  • Apply for a Further Advance, the additional borrowing facility.

2. Free Standard Valuation:

  • No standard valuation fees for homebuyers (on Flexclusive products only*) or for those who are remortgaging.

3. Free standard legal fees for house purchase (on Flexclusive products only*) cover the conveyancer’s professional charges relating to the house purchase only when using one of our panel legal firms. The customer will be liable for some additional fees relating to the disbursements, e.g. Land Registry fees and local authority searches. Due to Northern Irish law, Nationwide is unable to offer free legal fees for house purchases in Northern Ireland.

4. Cashback is payable one month after completion of the mortgage

5. Maximum LTV:

  • Lending above 85.01% is available on fixed rate mortgages.
  • 95% LTV mortgages are available to:
    • Existing Nationwide mortgage borrowers switching at the end of their current deal or moving home.
    • Save to Buy customers.
    • NewBuy customers
  • 90% LTV mortgages are available to:
    • Existing Nationwide mortgage borrowers switching at the end of their current deal or moving home.
    • First-time buyers and home movers.
  • First-time buyers can access 95% LTV products through Save to Buy and NewBuy.
  • Maximum 75% LTV on new build flats and 85% LTV on new build houses (90.01% to 95% LTV for approved NewBuy housing providers).

6. Base Mortgage Rate

  • Any mortgage products reserved on or before 29 April 2009 will revert to the Base Mortgage Rate (BMR). If the borrower chooses to switch to a new Nationwide mortgage product, the new product will currently revert onto our Standard Mortgage Rate (SMR).
  • Both are variable rates which we may vary in accordance with our mortgage terms and conditions. However, the BMR is guaranteed to be no more than 2% above the Bank of England base rate, whilst the SMR has no upper limit or cap. If the borrower chooses to switch to a new product from a BMR, it is not possible to switch back to the BMR at a later date.
  • All mortgages reserved on or before 3 March 2010 include the option to apply for a payment holiday and borrow-back facility. Any mortgages reserved after this date will no longer include these facilities.
  • If the borrower is currently letting their property they will be unable to switch to a new mortgage deal and their mortgage will automatically revert to the Nationwide variable rate as stated in their mortgage offer.

*To get access to our range of Flexclusive offers customers must either:

1. hold a FlexAccount with a Visa debit card (not cash card or cash card+) and:

  • have been paying in £750+ a month (excluding internal transfers) for the last 3 months; or
  • complete an account switch to us (from a non-Nationwide account) using our Current Account Switch Team or have done so in the last 4 months; or

2. hold a FlexDirect or FlexPlus account.

About Nationwide Building Society

Nationwide is the world's largest building society as well as the second largest savings and mortgage provider in the UK. It is also a major provider of current accounts, credit cards, ISAs and personal loans. Nationwide has around 15 million customers.

Customers can manage their finances in a branch, via the mobile app, on the telephone, internet and post. The Society has around 17,000 employees. Nationwide's head office is in Swindon with administration centres based in Northampton, Bournemouth and Dunfermline. The Society also has a number of call centres across the UK.

Customers can manage their finances in a branch, via the mobile app, on the telephone, internet and post. The Society has around 17,000 employees. Nationwide's head office is in Swindon with administration centres based in Northampton, Bournemouth and Dunfermline. The Society also has a number of call centres across the UK.

Please note: If you are a customer looking for information on our products and services, please visit the main website.