Consumer champion Which? has written to the FSA claiming Nationwide Building Society could potentially be in breach of consumer regulations.
Its concerns relate to Nationwide's decision to raise interest rates 1.5% for residential mortgage customers who let out their home.
Nationwide plans to introduce the rate rise from 1 September this year for customers who have let out their home for three years or more. It said the increase reflects the higher risk and cost posed by such borrowers.
Which? wrote to Nationwide in June regarding the matter after being contacted by affected members. It believes the decision is unacceptable and seriously affects people who signed fixed-term deals and will now see their rates rise part way through the deal.
The consumer champion has contacted the FSA asking it to stop Nationwide from going ahead with the rate rise.
In a statement to Which?, Nationwide says: "Our mortgages are designed and priced for customers who live in their homes. When properties on a residential mortgage are rented out over the longer term they result in additional risk and administration cost and we believe it is appropriate to levy an additional interest rate on these accounts."
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