Mortgage borrowers seeking new deals are facing unpleasant news as multiple lenders have raised their rates, leading to an uptick in average fixed rates for homeowners. Moneyfacts, a financial information website, highlighted adjustments in fixed deal pricing by lenders such as First Direct, Coventry Building Society, Yorkshire Building Society, and Nottingham Building Society. Cumberland Building Society is also withdrawing products temporarily to reassess its mortgage pricing strategy.
Following recent rate hikes by HSBC UK, NatWest, and Nationwide Building Society, the average two-year fixed homeowner mortgage rate rose to 4.87% from 4.84% on Friday. Similarly, the average five-year fixed homeowner mortgage rate increased to 4.98% from 4.96% on the same day.
Adam French, head of consumer finance at Moneyfacts, mentioned that the expectation of a base rate cut in March was altered due to increased conflict in Iran, which sparked inflation concerns. This change in sentiment affected swap markets used by lenders to fund fixed-rate mortgages, leading to adjustments in mortgage pricing. Several lenders, including HSBC, Nationwide Building Society, Virgin Money, and Gen H, have raised their fixed-rate deals by up to 25 basis points.
Nicholas Mendes, mortgage technical manager at John Charcol, noted that geopolitical risks have swiftly impacted mortgage rates, prompting a wave of lenders to reconsider their deals. Market volatility may continue to influence pricing, emphasizing the importance of securing rates early for borrowers considering remortgaging. The evolving economic landscape could potentially impact property price growth, offering buyers negotiating opportunities in the changing market conditions.