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Major lenders raise mortgage rates
Nationwide, Santander and NatWest will be increasing rates from today; providing more bad news for homebuyers and those looking to remortgage.
They follow various rivals, including Barclays, HSBC, NatWest, Accord and Leeds Building Society, who pushed up their rates last week.
A ‘higher for longer’ interest rates scenario has prompted the changes.
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.
Among the changes today, Nationwide will increase rates on deals by up to 0.25 percentage points.
The average rate on a two-year fixed deal is now 5.87%, according to the financial information service Moneyfacts. That is still about a percentage point lower than last year’s peak.
Aaron Strutt from Trinity Financial said: “Many people expected the cost of fixed rates to drop rather than increase and these higher rates do put people off buying.
“It would not be a surprise to see more banks and building societies raising rates this week.”
The Bank of England makes its next decision on benchmark interest rates on 9 May.
It is now not expected to cut the rate as early or as often as previously thought.
Original article from Property Industry Eye – Marc Da Silva
