Nationwide, Britain’s biggest building society, has put the change down to the unstable economic climate, claiming that balancing the needs of its savers and borrowers was becoming difficult with low interest rates.

Although existing borrowers will migrate to a lower rate, with the guarantee it will not rise more than 2% above the Bank of England base rate, anyone taking out a mortgage after Thursday will not have this guarantee.

Financial analysts have said the move has effectively created two tiers of borrowers, with new customers getting an unfair deal. They also warned that other lenders could follow suit, increasing their standard variable rates.

Melanie Bien, of Savills Private Finance, concluded: “The current rate has proved to be so competitive for borrowers and therefore costly for Nationwide, that it is reviewing its strategy.”