After recent adjustments from various lenders, mortgage borrowers seeking new deals will face higher rates as average fixed rates for homeowners have been on the rise. Moneyfacts, a financial information website, highlighted that lenders like First Direct, Coventry Building Society, Yorkshire Building Society, and Nottingham Building Society have all made changes to their fixed deal pricing. Additionally, Cumberland Building Society is temporarily suspending some products to reassess its mortgage pricing.
These rate hikes come after increases announced last week by major lenders such as HSBC UK, NatWest, and Nationwide Building Society. Data from Moneyfacts shows that the average two-year fixed homeowner mortgage rate increased to 4.87% from 4.84% on Friday, while the average five-year fixed rate rose to 4.98% from 4.96%.
Adam French, head of consumer finance at Moneyfacts, explained that expectations of a base rate cut in March were reversed due to heightened geopolitical tensions, leading to inflation concerns and potential increases in energy prices affecting mortgage rates. This shift in market sentiment has influenced lenders to adjust their fixed-rate offerings as funding costs have surged.
As a result, many lenders, including HSBC, Nationwide Building Society, Virgin Money, and Gen H, have raised fixed-rate deals by up to 25 basis points, causing average mortgage pricing to climb. Borrowers are now facing a more volatile mortgage pricing environment than previously anticipated, with future trends dependent on global market conditions and inflationary pressures.
Nicholas Mendes, mortgage technical manager at John Charcol, noted that recent events have led to a rapid reassessment of interest rate expectations, resulting in lenders reconsidering their offerings. As market volatility persists, borrowers approaching remortgages are advised to secure rates in advance to shield against pricing fluctuations. Furthermore, economic conditions may impact property prices and bargaining power for buyers in the coming months.
