Mortgage rate hikes announced by major lenders
Barclays, HSBC, NatWest, Accord and Leeds Building Society will be increasing rates from today; bad news for homebuyers and those looking to remortgage.
The lenders have opted to up their rates as a ‘higher for longer’ interest rates scenario starts to emerge.
City analysts had initially projected up to seven base rate cuts this year, but now just two or three are anticipated, with the first reduction expected to take place in August, placing upward pressure on rates.
Fixed rate mortgage prices are reflected in Sonia swap rates. These show what lenders think the future holds concerning interest rates and this governs their pricing.
Nicholas Mendes, mortgage technical manager at broker John Charcol, commented: “Swaps had increased at the end of last week following recent data announcements in the UK and US, with speculation building momentum of a delayed bank rate reduction to August adding to the likelihood of two or three bank rate reductions this year diminishing.
“This latest move from HSBC leaves Nationwide and NatWest leading from the front on purchase and remortgage deals, which will inevitably mean service levels coming under pressure and eventually similar moves from the remaining lenders.”
Barclays has announce that it will be increasing rates by 0.1% increase across a range of its mortgage products.
NatWest said it would raise some of its two and five-year “switcher” deals for existing customers by 0.1%.
HSBC added it was increasing some of its rates today, but has not yet given details of the increases.
Building societies are also raising fees. Leeds Building Society said it was increasing the fixed rate on selected products by up to 0.2% for both new and existing customers.
The Co-op said it was putting up the rates on some of its fixed deals by up to 0.41% from Monday but cutting the rate by 0.07% on others.
According to financial information service Moneyfacts, the average two-year fixed mortgage rate is 5.82%, while the average five-year fixed rate is 5.40%.
Mark Harris, chief executive of SPF Private Clients, commented: “It looks as though it could be a bumpy few days for pricing.
“Before costs of funds and volumes are more palatable, lower rates won’t return so we expect other lenders to follow suit before prices improve.”
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