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HSBC is raising rates on all its fixed-rate residential mortgage deals from today, becoming the latest of Britain’s biggest lenders to raise rates.
It is the second time in a fortnight that HSBC has raised rates.
NatWest also this week increased several of its two- and five-year deals by up to 0.1 percentage point for existing customers remortgaging.
Barclays yesterday announced increases of up to 0.25 percentage points in its purchase and remortgage ranges.
The new round of increases deals a new blow to the 1.6 million British homeowners who are about to remortgage.
HSBC is raising rates on all its fixed-rate residential mortgage deals from today, becoming the latest of Britain’s largest lenders to increase rates (file image)
Ranald Mitchell, broker at Charwin Private Clients, said borrowers will suffer more mortgage misery as HSBC becomes the latest lender to raise rates in what has now become an “established upward trend”.
“This increase will further dampen the hopes of millions of mortgage holders and aspiring homeowners that this year will be better than last,” he said.
Swap rates, which dictate how much it costs banks to lend money to borrowers, have been rising after the UK inflation rate remained unchanged at 4 percent in January.
As a result, lenders have been quick to close deals and revalue them at higher rates.
The average two-year fixed rate contract is now 5.76 percent, up from 5.58 percent a month ago.
Five-year deals have also risen from 5.22 per cent to 5.34 per cent in the same period, according to rates expert MoneyfactsCompare.
Katy Eatenton, a mortgage specialist at Lifetime Wealth Management, suggests homeowners who are about to remortgage should apply for a new deal now, before mortgage rates fall further.
“It’s time for borrowers to stop procrastinating or waiting for the market to bottom,” he says.
“If, by a miracle, rates start to fall again after the budget, products can be changed, but if not, today’s rates will disappear tomorrow.”