Mortgage rates are back on the rise again after three more lenders hiked their prices this week in response to market conditions.
Santander and Halifax were among those tweaking rates upwards due to rising swap rates, which impact the pricing of fixed rate mortgages.
According to Nicholas Mendes, mortgage technical manager at John Charcol, there have been ‘meaningful shifts’ in swaps over a short period of time in response to growing concerns over inflation.
Indeed, inflation rose from 2.6% in March to 3.5% in April as households were hit by higher bills and tax increases.
Mendes said: “Lenders have already started to respond. In the past fortnight, several major providers including HSBC, NatWest, Nationwide, Santander and Skipton have raised rates on selected mortgage products.
“Although there was a brief dip in swaps following news of further US tariffs on European goods, inflationary concerns have since reasserted themselves and the upward trend has resumed.”
How will rising mortgage prices impact borrowers?
With more lenders announcing price rises since then, the sentiment across the mortgage industry is that the trend for falling mortgage rates which borrowers have been seeing in recent months may have come to an end.
Mendes added: “While a sharp increase is not anticipated, the most competitive deals, particularly those priced below 4%, are now under pressure.
“If swap rates remain elevated or rise further, it is likely that more lenders will reprice in the weeks ahead. Service levels could also be affected if there is a rush of borrowers trying to secure current offers.”
Ultimately, said Mendes, there are still good rates available but the ‘window to secure them may be narrowing’.
His advice has been echoed by other mortgage brokers, with Andrew Montlake, CEO at Coreco, telling the Newspage Agency: “In a capricious market such as this, it pays to act quickly and lock into a rate first to ensure you get the home of your dreams rather than trying to play the market and risk everything.”
With many attractive deals still on the table, borrowers looking for new mortgage deals are being urged to get advice and search for the best rate.
Rob Peters, principal at Simple Fast Mortgage, also speaking to Newspage, said: “Rates remain historically low compared to where they were even six months ago so while this round of increases isn’t ideal, it’s not a disaster, either. Lenders are responding to real-time conditions and borrowers should, too.
“The message is clear: don’t wait for a perfect moment, get advice now, compare options and lock in where it makes sense to do so. There are still plenty of good deals out there.”
