Britain's biggest lenders have started upping rates on residential mortgages in a sign the era of record-low property borrowing deals could be nearin
Britain’s biggest lenders have started upping rates on residential mortgages in a sign the era of record-low property borrowing deals could be nearing its end.
Nationwide today (28 September) raised two-year fixed rates by 0.25 percentage points across 60 per cent and 75 per cent loan-to-value (LTV) tiers and 0.1 percentage points at 80 and 85 per cent LTVs.
Skipton is also poised to raise rates on residential products and has withdrawn a number of buy-to-let deals.
The lender has confirmed that rates on selected residential mortgages will be increased by an average of 0.16 percentage points from tomorrow (29 September).
Mortgage rates have been at record lows and falling since the Bank of England cut the base rate to 0.25 per cent in August 2016.
But many commentators believe the bank’s Monetary Policy Committee is now edging towards a rate increase.
A Skipton spokesperson said a number of other lenders had already increased rates on some of their mortgage ranges.
They added: “Last week we reduced the rates on our core range and launched some best-buy intermediary exclusives. This month we also introduced some very competitive three-year fixes for intermediaries.”
Daniel Bailey, principal at Derbyshire-based Middleton Finance, said: “We could be seeing the first tentative signs that lenders are now looking to increase fixed rates ahead of a potential increase in the Bank of England base rate before the end of the year.
“Mark Carney has predicted many times that interest rates were going to increase and nothing has happened. It almost feels like rates need to increase for him to keep any credibility. Now may be the time to fix into a fixed-term deal if you have been sat on standard variable rate for some time.”
David Hollingworth, associate director, communications at London and Country, said: “Swap rates are as high as they have been this year. They can always come back down again, but when you see someone like Nationwide hiking rates, that is something to take notice of.
“It can be a signal that the expectation is starting to filter through into the cost of funds.
“It is probably too early to say that everyone will do it, because the market is so competitive that some could elect to give up a bit of margin to maintain their position. But it is a valid point to raise that we all know fixed rates won’t necessarily stay as low as they have been forever.”