From This is Money:
The fixed rate deals allow borrowers who are stuck in negative equity to take out a new mortgage of up to 95% of the value of the property they want to move to, and bundle in up to 25% of the loss of value of their existing property.
A spokeswoman said: ‘This is for people in a very specific circumstance: Nationwide borrowers in negative equity who want to move home.’
The move by Nationwide, which is Britain’s biggest building society, has not been promoted and it says it is available only to borrowers who undergo strict affordability tests to ensure they can meet their repayments.
And those wanting to take advantage of the offer will find rates to be expensive. They will be offered up to 95% loan-to-value deals at fixed rates of 6.73% for three years or 7.48% for five years, with additional borrowing, up to 30%, at 7.48% and 7.98% respectively.
Borrowers will be locked into the high rates with early repayment charges for the three or five year terms, but can overpay up to £5…