Santander, Coventry Building Society and TSB have followed Nationwide in announcing price hikes to their mortgages this week.
It comes following weeks of price cuts, when lenders were reducing rates to more competitive levels compared to the highs experienced in 2023.
The reason lenders are now changing course is because of something called SWAP rates. These are used by lenders to set their pricing and they have recently increased.
Ben Perks, managing director at Orchard Financial Advisers, who was speaking via the Newspage Agency, said: “As SWAP rates increase further, lenders will have to reprice accordingly.
“Hopefully this is a blip and the reductions will come again soon. Pressure is surely mounting on the Monetary Policy Committee [at the Bank of England] to reduce the base rate at the next meeting.
“The economy and property market need stimulating and borrowers in particular need a confidence boost.”
What’s the advice for those people taking out a mortgage now?
With prices looking like they are starting to increase again, it may be tempting to hold off if you are about to remortgage or buy a home.
The average two-year fixed rate mortgage is currently 5.71%. Meanwhile a five-year fixed rate is typically 5.29%. This compares to the average standard variable rate (SVR) of 8.17%.
For those remortgaging, the cost of holding off and reverting to your lender’s SVR is higher than switching.
It may, therefore, be a good idea to seek advice from a mortgage broker or adviser to guide you through your options and find you the cheapest deal.
Katy Eatenton, mortgage & protection specialist at Lifetime Wealth Management, also speaking via the Newspage agency, said: “While there is such volatility in the mortgage market, advice is critical. Don’t procrastinate if your rate is ending in the next six months.
“Hopefully rates will start coming down again in the second quarter, but it is still advisable to secure the best rates possible today.”
