Nationwide customers have erupted in fury and incredulity at a ruling from the mutual that bars borrowers who pay to escape a fixed-rate mortgage from applying for a new loan.

The exclusion applies even if they have a huge deposit, excellent earnings and perfect credit ratings - and pay a hefty early redemption charge (ERC).

Mark Couves from Oxfordshire has been a Nationwide mortgage customer for 25 years. Last July, he took out a mortgage fixed for five years at 5.83%.

"I got that wrong. I'm happy to pay the £3,250 exit fee but I want to stay with Nationwide - it's loyalty as well as being less hassle. I owe about £105,000. My home is worth at least four times that and I can easily afford the loan. I was told the decision to refuse me another mortgage was 'taken in the best interests of Nationwide and its loyal members'. I'm a loyal member and this is not in my best interests. One adviser even told me he thought the policy was absolutely insane."

Erica Plowman has two Nationwide loans totalling £135,000 on her east London home. "As one of my mortgages is now on a low rate and the other still on the 5.68% fixed I'd taken out in September 2007, I wanted to know whether moving the fixed rate was worthwhile. But its customer services refused to do the sums saying I would have to go elsewhere. I was told Nationwide had received loads of complaints about this. Yet the option is in my terms and conditions.

"It's probably not worth me switching but there is a principle here and Nationwide is stopping my choice as a consumer. I have been very happy with the society. Now I'm very angry."

Bryn Lewis from south London took out a 5.85% Nationwide five-year fixed rate mortgage last spring.

"I believe I could save each month by paying the early repayment charge and opting for a tracker or a lower cost fixed deal," he says.

But Nationwide told Lewis in late January he would have to go elsewhere if he left his deal.

"I have had no notification. It contradicts my mortgage offer which said I would pay a 3% early repayment charge if "you repay the mortgage or transfer to another product within the benefit period".

Guardian Money asked other lenders for their policy. None of those we contacted would force customers away - most said they could not understand Nationwide's reasoning. One says it is "bonkers to give up good customers to another lender".

Halifax says: "We allow borrowers to redeem, pay the ERC and take out a new loan."

"There are no restrictions. Mortgage customers can remortgage on to any deal they wish if they leave a fixed rate early," says Woolwich.

"We don't have a policy of banning," says Yorkshire building society.

Abbey said: "Providing they pass our credit tests and pay a new fee, they can remortgage with us if they wish." NatWest and Britannia said they do not bar customers who redeem loans early.

Nationwide said: "Under the terms of a customer's fixed-rate mortgage offer they can pay an early repayment charge and redeem their mortgage early, however there is no obligation for Nationwide to provide an alternative product for customers to move to if they wish to break their deal early. When a customer exits a mortgage deal early we incur a cost and this is not necessarily covered by the early repayment charge. We do not wish to lose customers."