Britain's biggest building society today announced plans to push up its mortgage rates for new borrowers.
Nationwide is making increases of 0.3 percentage points on some of its fixed-rate products from tomorrow and 0.2 percentage points on tracker mortgages.
Borrowers who are already with Nationwide and choose to stay with the society for their next deal will be offered rates priced at 0.1 percentage points below the new products, meaning they face a softer blow than new customers.
The increased rates come despite the Bank of England and the Treasury's recently-launched "funding for lending" scheme, aimed at unclogging the flow of credit.
And they will not bring much comfort to people looking to switch from other lenders who have also been hiking their rates, blaming the weak economy and the increased cost of funding a mortgage.
Clare Francis, a mortgage expert at comparison website MoneySupermarket, said: "The rates are going up and that's disappointing. The funding for lending initiative is aimed to get banks and building societies to lend.
"The hope was that it would result, perhaps, in increases in higher loan-to-value mortgage numbers and so far there is little evidence that is happening."
Lenders generally have also been tightening their borrowing criteria, making it tougher for borrowers to switch deals and those with lower amounts of equity are expected to have a particularly difficult time.
Santander recently announced plans to raise the standard variable rate (SVR) on its mortgages in a move which means hundreds of thousands of its existing customers face mortgage hikes from this autumn. More than a million home owners saw their rates increase in May when a string of lenders imposed rate hikes.
Ms Francis highlighted the recent withdrawal from the market of HSBC's five-year mortgage deal with a record low 2.99% rate for people with a 40% deposit.
There have been signs among lenders of increased competition for those with bigger deposits, while mortgages for those with lower deposits have shrunk back significantly in recent months.
Ms Francis said that people being offered discounted rates for customer loyalty should still shop around as there are deals on the market which can better many of those being offered by Nationwide.
She said people should not just stick with their lender because they are being offered a discount and they should seek out a mortgage adviser if they are unsure what to do.
Nationwide offered an estimated £17.1 billion in mortgage lending last year and increased its share of the market to 12.1%, from 9% in 2010, according to figures from the Council of Mortgage Lenders. It was the joint third largest mortgage lender last year, alongside Barclays.
A spokesman for Nationwide said the increases to its rates had been made to keep the lender in line with the rest of the market and its products remain competitive. Its NewBuy and four-year fixed rates will remain unchanged.
The society said it had previously offered some loyalty rewards depending on people's circumstances, but under the changes existing customers will get the reduction on any rate from its range of fixed and tracker mortgages.
This reduction will apply to those moving home, switching at the end of their deal and those who want to increase their borrowing.
Tracie Pearce, Nationwide's head of mortgages, said: "We wanted to give existing customers the clear message that their loyalty is valued."
Rachel Springall, spokeswoman for comparison website Moneyfacts, said Nationwide's new range includes a market-leading four-year fixed mortgage at 3.09% for new customers with a 30% deposit.
Which? chief executive Peter Vicary-Smith said: "We're seeing worrying signs that more and more lenders are putting up their interest rates and tightening their lending criteria.
"This can be a critical blow to households who are already on the edge and struggling to pay their bills.
"The Government needs to explain why thousands of homeowners are still being hit by increases when the banks are supposed to be passing on cheaper credit through the funding for lending scheme."