Homebuyers and remortgagers are facing a fresh squeeze on their finances after three of Britain’s biggest lenders updated their mortgage rates within hours of each other.
Nationwide, Virgin Money and Barclays all confirmed increases of up to 0.35 percentage points on a raft of fixed and tracker deals with the brokers warning that it is only the beginning of a “swathe of hikes” to come. Nationwide is lifting rates across its first-time buyer, home mover, existing customer and remortgage ranges.
Virgin Money is raising selected purchase and remortgage rates by the same margin, while Barclays confirmed rises of up to 0.37 per cent on products across its residential and reward books.
The triple hit comes as fears grow over a fresh escalation in the Middle East, where Iran and the United States have returned to open conflict.
The turmoil has sent oil prices climbing, with Brent Crude now trading at $85 a barrel – up sharply from a low of $71 just a fortnight ago, though still below May’s high of $114.
Gilt yields and swap rates, the measures lenders use to price fixed-rate mortgages, have risen in tandem, forcing banks and building societies to reprice at speed.
Samuel Mather-Holgate, managing director at Mather and Murray Financial, called the increases a “brutal blow for borrowers”.
He said: “When Britain’s biggest building society starts hiking fixed and tracker rates by up to 0.35%, it sends a chill through the whole mortgage market.
“The cause may be thousands of miles away, but the pain lands straight on UK kitchen tables.”
Andrew Montlake, chief executive of London broker Coreco, told Newspage: “Higher mortgage rates are here, and they are coming from multiple lenders,” he said, urging anyone in the market for a deal to “lock in quickly.”
Brokers were united in insisting the moves had nothing to do with the Bank of England, whose base rate has not shifted.
Trinity Finance’s Omer Mehmet said the coordinated increases showed “just how quickly mortgage pricing can change when financial markets become unsettled,” while Michelle Lawson, of Lawson Financial, said “the Middle East melee continues” and warned borrowers to expect more pain ahead.
Not everyone urged panic, however. Stephen Perkins, of Yellow Brick Mortgages, said the priority was to avoid rash decisions, while pointing out that many lenders let borrowers switch to a cheaper rate before completion if pricing improves.
Jamie Elvin, of Strive Mortgages, agreed, saying the smarter move was usually to secure a competitive deal already on the table rather than “second-guess the market.”
Evren Ergin, of ValuQ, put it more bluntly, telling borrowers hoping to time the market perfectly: “The number you are trying to catch moves on missiles, not on your mortgage plan.”