Mortgage rate rises continue as Nationwide, NatWest and Santander make increases

Three major mortgage lenders have raised their rates this week, dealing another blow to homeowners and homebuyers.

Nationally, NatWest and Santander have increased interest rates on their fixed-rate mortgages, including remortgage and purchase transactions.

Several of the best buys have disappeared from the market, meaning the lowest rates available to borrowers have increased.

The lowest five-year fixed rates have gone from less than 3.9 percent at the beginning of the year to 4.24 percent or more, while the lowest two-year fixed rates have gone from just over 4 percent at 4.6 percent or more.

The two-year average settlement is now 5.87 per cent, according to Moneyfacts, up from 5.56 per cent at the start of February.

The five-year average settlement has increased from 5.18 percent to 5.44 percent.

For someone with a £200,000 mortgage that must be repaid over 25 years, it is the difference between paying £1,190 a month and £1,221 a month.

The moves by Nationwide, NatWest and Santander have followed a series of changes across the market, with more than 20 lenders raising rates last week alone.

HSBC and Barclays raised mortgage rates last Tuesday and this was followed by increases in mortgage rates from Halifax and TSB on Friday.

What are the mortgage rate increases this week?

Santander kicked off the rate hikes on Monday by announcing a wave of fixed and tracking rate increases on its residential and buy-to-let products.

Residential fixed rates increased by between 0.04 per cent and 0.2 per cent for all buyers and remortgage customers. All buy-to-let fixed rates increased by up to 25 basis points.

Justin Moy, managing director of brokerage EHF Mortgages, told news agency Newspage: “Another dismal start to the week, with further rate rises this time from Santander, likely to trigger similar activity with other major lenders.” .

NatWest followed Santander with similar increases across the range of residential fixed income and buy-to-let deals, all with increases of up to 22 basis points.

Buy-to-let investors will have missed out on two better buys aimed at those buying with a 25 per cent deposit from NatWest.

Its two-year fee-free rate increased from 5.29 per cent to 5.47, while its five-year rate (with a fee of £995) increased from 4.5 per cent to 4.64 per cent.

Britain’s largest mutual company, Nationwide, increased several of its fixed rates by up to 25 basis points.

First-time buyers and people moving home with smaller deposits are likely to be among those most affected by the changes.

Its mortgages aimed at those buying with a 5 or 10 per cent deposit were among the lowest rates on the market. Now all of them have increased by up to 25 basis points.

Nationwide’s lowest two-year fix for someone buying with a 10 per cent deposit is now 5.29 per cent or 5.79 per cent if buying with a 5 per cent deposit.

The lowest two-year fixed mortgage rate for someone buying with a 10 per cent deposit is now charged by Clydesdale Bank at 5.19 per cent, while the lowest rate for someone buying with a 5 per cent deposit percent is 5.47 percent, offered by Halifax.

Stephen Perkins, managing director of Yellow Brick Mortgages, told news agency Newspage: ‘Nationwide is the third big six lender, behind Natwest and Santander, to announce increases in its interest rates, making the start of the week is challenging.

“The market is doing everything it can to dampen the remaining optimism of potential buyers; let’s hope this doesn’t dampen their hopes of purchasing a property.”

Will mortgage rates continue to rise?

All three lenders offered several deals that were among the lowest rates on the market in certain areas.

Now all three are much lower on best-buy lists, meaning other lenders like Halifax and First Direct could come under increased demand from borrowers and may also have to raise their rates to avoid being hit. overwhelmed.

Aaron Strutt, director of products and communications at Trinity Financial, believes we are more likely to see a rate increase in the coming weeks.

“When three of the big lenders raise their rates on the same day, it isn’t long before the other banks and building societies follow suit,” Strutt added.

Nicholas Mendes, mortgage technical manager at John Charcol, also says borrowers should expect interest rates to stay high for longer.

“This latest revaluation will put pressure on other lenders to adopt similar measures this week or next to avoid being market leaders and avoid the impact on their service levels,” Mendes said.

‘Given the nature of the market, those who may be hesitant to commit to a deal should continue to contact a broker and discuss options.

‘While we anticipate a reduction in fixed rates, the timetable for this adjustment may be somewhat longer than initially expected.

“It is important to note that even if a deal is closed, there is still flexibility to make changes near completion should a more favorable offer become available.”