In a move to protect it’s savers, Nationwide has announced it is to cut it’s promise to peg its variable rate mortgages to the Bank Of England base rate.

Nationwide had to now, guaranteed to pay no more than 2% above the Bank rate, which currently stands at a historical low of 0.5%. However, new customers will not have any such guarantee when their fixed-rate deal ends and they decide to move to a variable rate.

Nationwide said that it must balance out the needs of it’s savers as well as it’s borrowers in making it’s decision to change the variable mortgage terms.

At present, Nationwide’s base mortage rate is 2.5% – two percent higher than the current interest rate of 0.5%. Existing variable rate customers are enjoying this rate, however, from the 30th April, any new variable rate customers will be offered 3.99%.

Andy McQueen, mortgage director at Nationwide said: “”The mortgage market has experienced fundamental changes due to the prevailing economic and market conditions. We are currently in a very low interest rate environment, which can be challenging when balancing the needs of both our savers and our borrowers.”