Julia Harris, Mortgage Expert at Moneyfacts.co.uk the money search engine, said: Our research teams process on average 600 requests per month from mortgage lenders to make changes to their product ranges, so its not unusual to see mortgage rates moving during periods of base rate stability.”
While lenders could be hedging against the possible uncertainty in the mortgage market, there could also be many other reasons underlying these changes.
Lenders frequently reprice their mortgage portfolios dependent on their current strategy within the mortgage market, whether they want to increase or decrease market share. They may have been predicting base rate rising to 6 per cent before now and factored this into their pricing plans.
Harris said: These charges should not spark fear that the sub prime crisis has hit the UK prime market. Its causing unnecessary worry, which can only make the situation worse. Its far to early for the crisis to have reached the prime market, with tracker mortgages often financed from the lenders balance sheet, and only a few known lenders reliant on the current volatile LIBOR market. If the provider remains liquid, the UK housing market stable and arrears low, there is no immediate concern.
With many fixed rates falling, the mortgage market is being pulled in different ways by many market forces. If we start to see more significant and prolonged increases, or standard variable rates begin to rise, then it may be a sign that the market is suffering at the hands of its investors.
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