Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.
Major Lenders Announce Second Round of Mortgage Rate Hikes This Month
NatWest, Santander, HSBC, Lloyds, Nationwide and TSB have increased mortgage rates for a second time since the start of September. The moves respond to growing inflation concerns, with swap rates having climbed above 4.7%.
The Cost to Borrowers
Average rates are now 89 basis points higher than at the beginning of March, when the impact of the war in Iran first sent swap rates soaring. According to Moneyfacts, this equates to an average £131 per month, or £1,572 per year, in mortgage repayments, based on a £250,000 loan over 25 years.
What the Experts Say
Moneyfactscompare.co.uk finance expert Rachel Springall said a second wave of rate hikes had begun from the major banks, leading NatWest, Santander, HSBC and TSB to increase selected fixed rates for the second time this month. She noted it is highly likely other lenders will follow suit, and with some deals withdrawn from the market, any returning deals could well be priced higher.
Springall also noted that several building societies have started to reprice for a second time this week, including Nationwide, while others have withdrawn and replaced products. The average two-year fixed mortgage rate is at its highest point since June, with the average five-year fixed back at levels not seen since April.
Commenting on Santander's changes, Trinity Financial product and communications director Aaron Strutt said the bank's price hike of 45bps on two-year fixes and 40bps on five-year fixes would come as a shock to customers. He said he could not remember the last time five of the big six lenders hiked their rates on the same day, and that the change means Santander is pulling the last of its sub-5% rates. It had a 4.52% two-year fix a few days ago.
What It Means for Letting Agents and Inventory Clerks
The rate hikes affect borrowers directly, and agents and clerks should be aware that landlord and buyer activity may shift as mortgage costs rise. With more deals being withdrawn and repriced, remortgaging landlords could face higher costs, which may influence rental market conditions and property turnover.
Source: Mortgage Strategy