Halifax and Nationwide raise mortgage rates – and more lenders set to follow
Halifax intermediary rates have today been increased by 0.15% on homemover and first-time buyer two- and three-year fixed products, and by up to 0.2% on remortgage loans.
Fees have also been increased on select deals.
And Nationwide yesterday withdrew and replaced two-year, five-year and 10-year fixes with rates up to 0.95% higher.
The Post Office has this week also pulled deals, including a two-year fixed rate at 1.73% without a fee at 60% loan to value (LTV), according to Moneyfacts.co.uk.
More lenders could raise rates in the coming days, according to experts.
Andrew Montlake, director at broker Coreco, said: “Given the latest bullish comment from the Bank of England on the future path of interest rate rises and the recent increase in swap rates, Halifax is unlikely to be the only lender putting their rates up over the following days.
“Together with the end of the Term Funding Scheme in February it seems that competitive pressure alone will not be sufficient to keep rates at their current low levels.”
A Halifax spokeswoman said: “Our mortgage rates are determined by a number of factors and we regularly review our products and policies to ensure they continue to meet customers’ needs.”
Cheap money coming to an end
The Bank of England yesterday said interest rates could rise sooner and faster than previously forecast, drawing a close to the decade-long supply of cheap money.
The Term Funding Scheme (TFS) scheme, which extended low cost money to providers for lending, is also coming to an end this month.
Rachel Springall from Moneyfacts.co.uk said: “These rises could be the start of a new trend in the mortgage market, fuelled by speculation of not only one base rate rise, but perhaps two or even three during 2018.
“We have seen in previous years that just a suggestion of rates rising can be enough for lenders to re-think their range. In addition, as the Funding for Lending Scheme has closed and the TFS ends at the end of February, banks and building societies that took part may well be assessing how long they want to prolong their low rates.
“Borrowers still have time to take advantage of the best deals, as there is a four-year window from the time of drawing funds from TFS.”