Several big mortgage lenders have made mortgage price hikes this week but experts believe it’s a short-term blip rather than a long-term trend.
In the last week Barclays, Halifax, NatWest, Santander and HSBC were among the providers to have announced rate rises, which had been largely expected after swap rates increased recently.
Swap rates are the measure used by lenders to adjust their pricing.
But along with their price hikes, some lenders were also reducing prices for certain types of lending.
For example, HSBC reduced the rates on its two-year fixed rate mortgages for those who need to borrow at 80% and 85% loan-to-value (LTV). Meanwhile it raised rates on lower value mortgages with LTVs of 60%.
In other words, those with lower deposits or equity were benefiting from price cuts whilst those putting down a higher percentage of their own money were faced with price increases.
Nicholas Mendes, mortgage technical manager at John Charcol mortgage broker explained this approach was reflected amongst other lenders and suggested they were being more cautious in response to market volatility and rising swap rates.
“These adjustments align with similar moves from major lenders such as Barclays, Halifax, Santander, and NatWest, who have all reacted to fluctuations in swap rates,” he said.
“While these repricing changes signal short-term market volatility, they don’t necessarily indicate a long-term trend.”
Mendes is advising anyone coming to the end of their fixed rate to secure a new deal now given potential for further changes following the Budget, which takes place on Wednesday 30 October.
“It’s important to stay vigilant and review options regularly,” he said, “as many lenders may reprice downwards in the coming months if economic conditions stabilise.”
In the last week average fixed mortgage rates have increased, according to data from Moneyfacts.
The average two-year fixed rate mortgage is currently 5.41% which compares to 5.39% this time last week. For a five-year fix, the average rate has increased from 5.08% to 5.10%.
Emma Jones, managing director Whenthebanksaysno.co.uk, speaking via the Newspage Agency, also thought lenders were now waiting for the Budget before making more price cuts.
“You sense lenders are buckling up for the next two weeks,” she said. “If the Autumn Budget isn’t an absolute disaster, we could see rates start to fall again very soon.”
