Major lenders are increasing a range of mortgage rates, despite the fall in the Bank of England base rate.
Nationwide Building Society, HSBC UK, Santander, TSB and Virgin Money aare some of those who have reviewed they offer.
Nationwide, the country's largest building society, has announced that new rates will kick in for mortgage applications starting Wednesday. The shake-up includes increases in selected two, three, and five-year fixed-rate deals by as much as 0.20 percentage points.
Nationwide attributes these adjustments to the prevailing swap rate conditions and the general uptick in mortgage rates observed in recent weeks. Swap rates influence how loans are priced.
However, it's not all upward movement; some of Nationwide's mortgage rates are on the decline. The building society is trimming its "new business" two-year tracker rates by 0.25 percentage points, mirroring last week’s cut in the Bank of England base rate.
Additionally, Nationwide is shaving off up to 0.11 percentage points from its 10-year fixed-rate products and reducing selected higher loan-to-value two-year fixed-rate products by up to 0.15 percentage points.
A spokesperson for Nationwide commented: "Nationwide is not immune to the current swap rate environment and the changes we’re making on our fixed-rate range are reflective of that and the rate changes happening across the market."
HSBC UK has announced that its tracker mortgage rates are set to drop as a response to the recent bank rate decision. The bank confirmed, "Our tracker rates are seeing a reduction to reflect last week’s bank rate decision. We continue to support existing customers with our pricing pledge and remain competitive and well-positioned in the market to support all borrowers."
HSBC UK is increasing fixed-rate mortgages from Wednesday, when it will make further details available. They explained that the setting of mortgage rates involves multiple factors. Santander increased selected mortgage rates by up to 0.31 percentage points on Tuesday.
This increment affected standard homeowner fixed rates, including purchase, remortgage, and green products, which jumped by up to 0.29 percentage points. TSB has announced increases on their two and five-year fixed rates for first-time buyers and home movers, going up by as much as 0.30%.
Virgin Money also declared an uptick in its fixed-rate mortgages starting Tuesday, with selected two and five-year rates for home purchases climbing by up to 0.15 percentage points, alongside certain deals being pulled from the offer list as part of their overhaul.
The environment is changing rapidly, as Hina Bhudia, partner at Knight Frank Finance, noted: "It often takes one large lender to prompt a broader shift in mortgage pricing and announcements of rate hikes are now coming thick and fast."
She added, "The outlook for interest rates has changed and the market needs to reprice as a result. The moves we’re seeing aren’t small either. We’ll need a real and enduring change in the inflation outlook for mortgage rates to begin falling again, which means the recovery is on pause for now."
Last week's move by the Bank of England to trim the base interest rate to 4.75%, a reduction of a quarter-point, was the second time this year rates have dipped. Some market watchers last week suggested cuts might not immediately lead to reduced mortgage costs as lenders had anticipated the move.
However, mortgage types like tracker deals generally match the base rate shifts. Nicholas Mendes, mortgage technical manager at John Charcol said: "While many lenders have opted to maintain their existing rates to preserve business volumes and service standards, those offering competitive pricing have been forced to adjust, likely due to applications levels.
"These influxes often stretch service levels, prompting rapid rate changes to manage demand effectively.Adding to the pressure, swap rates – key indicators used by lenders to price fixed-rate mortgages – have edged upward, further necessitating these adjustments. The combination of market dynamics and rising swap rates highlights the difficult landscape borrowers are navigating."