Lenders get ahead of Bank of England’s MPC with more rate increases – round-up
A raft of mortgage rate increases has been announced ahead of Thursday’s base rate decision, with hikes from NatWest, TSB and Coventry Building Society.
NatWest has announced increases of up to 43 basis points (bps), affecting new business and additional borrowing products.
Changes include a two-year fixed buy-to-let (BTL) purchase mortgage at 60% loan to value (LTV) with no fee, which has gone up by 30bps to 5.5%, while the option with a £995 fee has increased by the same amount to 5.04%.
The five-year fixed equivalents have also risen by 30bps to 5.36% and 5.24%, respectively.
For residential borrowers, the two-year fixed purchase deal at 60% LTV with no fee has risen by 36bps to 5.36%, and the product with a £995 fee has gone up by 30bps to 5.15%.
Cov BS pulls deals and ups mortgage rates
Coventry Building Society will withdraw all two-year interest-only fixed rates for new borrowers, excluding offset mortgages, and pull all two-year exclusive rates at 90% LTV for first-time buyers.
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For existing borrowers, the mutual will pull all two-year interest-only fixed rates, except for offset deals.
Coventry Building Society will also increase all fixed rates for new and existing residential and BTL borrowers.
TSB makes second round of rate increases this week
TSB has announced rate rises on all fixed house purchase and remortgage rates by up to 0.25%.
Across its BTL and portfolio BTL range, all fixed purchase and remortgage rates will rise by 0.2%. These changes will mark the second time in a week that TSB has increased pricing.
Skipton hikes all fixed mortgage rates
Skipton Building Society is also increasing rates across its entire fixed rate range for new and existing borrowers.
Principality BS increases mortgage pricing
Principality Building Society will raise rates across selected residential, new-build, joint borrower sole proprietor (JBSP), BTL and holiday let deals.
Pricing will rise by as much as 0.4%, such as its two-year fixed residential rates at 80% LTV and its two-year fixes at 85% LTV with a £895 fee.
More than a handful of changes
Nick Mendes, mortgage technical manager at John Charcol, said the mortgage market was “moving ahead of the MPC”.
He said the changes were not a reaction to the inflation figure, which showed a 3.1% rise today, but due to wholesale funding costs “rising for some time as markets price in a greater risk of bank rate staying higher, or moving higher, for longer”.
Mendes added: “That pressure is now feeding through quite visibly into mortgage pricing.
“Tomorrow’s decision still matters, but borrowers should not assume that a bank rate hold would immediately reverse what we are seeing today. Fixed mortgage rates are much more closely tied to swap rates and lenders’ funding costs, and those have already moved considerably.”
Mendes continued: “What is particularly notable is the breadth of today’s repricing. This is not one lender tweaking a handful of products. We are seeing increases across new business, remortgages, product transfers and buy to let from several lenders at the same time.
“For borrowers coming towards the end of a fixed deal, I would not wait for tomorrow hoping the bank provides a cheaper market overnight. Secure an affordable option where possible and keep it under review. If wholesale rates settle and lenders begin cutting again, there may still be an opportunity to switch before completion.”
