Virgin Money, Skipton Building Society and Metro are the latest lenders to announce increased mortgage rates for both residential and buy-to-let customers.
Mortgage prices have been rising steadily in recent months with the average two-year fixed rate now at 5.93% compared to 5.58% on 8 February, according to Moneyfactscompare.co.uk.
Five-year fixed rate deals are currently cheaper, averaging 5.50% according to Moneyfacts. But these are still more expensive than in February when the typical rate was is 5.22%.
With the lender rate hikes continuing and the Bank of England due to meet tomorrow to make its latest decision on whether to raise, cut or hold interest rates, brokers have put out renewed calls for action to support borrowers.
Mike Staton, director at Staton Mortgages, speaking via the Newspage Agency, said: “The current UK household is in serious need of resuscitation. After two years of being on the back of a financial hammering at every opportunity, we can see a clear chance to give homeowners a break from what feels like the Bank of England’s tyranny over homeowners and give them the breathing space to allow them to live their first normal summer with their heads above water.
“That first rate cut needs to happen on the 9th May, not only for the financial welfare of the UK, but the mental wellbeing of its population.”
When is the interest rate cut likely to happen?
The likelihood of a rate cut tomorrow is small, with economists predicting it will happen at the very earliest in June but more likely at the end of the summer.
As well as waiting for inflation to fall further, it is thought the Bank of England (BoE) will be influenced by other broader economic factors.
Michelle Lawson, director at Lawson Financial, who was also speaking via Newspage, explained: “What the Bank should do and what they will do are two entirely different things.
“The economy really needs some positivity and an injection of confidence so a cut would be perfect, but with the US Federal Reserve holding steady we are likely to do the same.
“If there is a further reduction in inflation in official UK data published this month, that may boost the chances of a June decrease in Bank Rate.”
And Alice Haine, personal finance analyst at Bestinvest said: “A rate cut at this week’s Monetary Policy Committee meeting appears unlikely, with rate setters likely to stick to the ‘higher for longer’ mantra for now as they wait for concrete evidence that inflationary pressures really have eased.”
Justin Moy, managing director at EHF Mortgages told Newspage borrowers may be waiting several months for the cut.
“The Bank of England needs to act immediately and cut the base rate by up to 0.5% to support both businesses and mortgage borrowers and inject renewed confidence into a flagging economy,” he said.
“Realistically, though, I see us holding rates throughout the Summer. That’s an easy cop-out and will likely be accompanied by plenty of finger pointing around the world as an excuse.”
Nonsense. Rates are normal now. They have been kept criminally low for too long, creating a bubble and pricing out a generation. You vested interests are asking for this to continue?