Loans and Finance

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Tuesday, February 26, 2008

Nationwide Puts Up Rates

As the effects of the self induced banking credit crunch continue to ripple through the economy as whole, Nationwide has told customers wanting a loan for over 75% of a property's value that they will have to pay higher rates of interest to cover the increased risks.

Nationwide has raised interest rates on deals above 75% by 0.2%.

Whilst this will hit first time buyers the hardest, it is a logical decision in the face of a faltering property market; building societies are not charities, they have as much right to make a profit as any other financial institution.

The increase in rates will also penalise existing customers, who have mortgages over the 75% threshold, and who are looking to remortgage. Statistics indicate that the average deposit in the UK is 20%.

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