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%.