Nationwide building society announced today it was increasing the cost of its fixed-rate mortgages by up to 0.3%.

The changes, which come into force tomorrow, wipe out some of the rate reductions made by the lender last month.

The group is increasing the rate of its best two-year fixed-rate mortgage for a homebuyer with a 25% deposit who pays a £599 fee from 5.95% to 6.25%.

The move will cost a homeowner with a £150,000 mortgage an extra £28 a month, or £336 a year.

Two-year fixed-rate deals for people who do not pay an arrangement fee are also being increased by 0.3%, rising to 6.65% for buyers with a 25% deposit and 7.35% for people who put down just 5%.

Both of these are higher than Nationwide's standard variable rate, which it calls its base mortgage rate, which is currently 6.49%.

Overall, just under half of the group's fixed-rate mortgages are now higher than its base mortgage rate, including all but one of its two-year fixed-rate loans for people remortgaging.

The group is also increasing the cost of its longer-term fixed-rate mortgages by between 0.1% and 0.2%.

Nationwide, the UK's second biggest lender, blamed the move on a "significant rise" in swap rates, on which fixed-rate mortgages are based, during the past few weeks.

Matthew Carter, divisional director for mortgages at Nationwide, said: "Swap rates have risen significantly in the last few weeks and as a result it has been necessary to increase the rates on our fixed-rate mortgages.

"While markets remain volatile we can expect to see frequent changes to fixed rates across the industry."

The number of mortgage products available is continuing to fall as a result of the credit crunch.

There are now just 3,775 different products available across the market, compared with 15,599 at the beginning of July before the problems hit.

Source: Guardian.co.uk