Mortgage rates start to climb as lenders react to Middle East war
Major banks and building societies are raising their mortgage borrowing rates as the impact of the war bites in the UK.
Major lenders are raising their mortgage rates as the war in the Middle East starts to impact the economy.
HSBC, Natwest, Nationwide and Coventry Building Society all announced increases to their fixed rate home loans, the Daily Telegraph reports.
Natwest and Nationwide said rates on fixed mortgages would rise by up to 0.25%, while Coventry said it was increasing all fixed rates for residential and buy-to-let mortgages.
HSBC increased rates for new customers by between 0.10% and 0.25%, and for existing customers by between 0.04% and 0.13%.
Reaching a 30-day high
The Negotiator reported last week that some lenders had paused or reconsidered planned rate reductions. Moneyfacts explained that so-called swap rates – which are used to help set mortgage rates – hit a 30-day high.
And economists warned that the Bank of England may be forced to raise interest rates.
Inflation fell to 3% in January from 3.4% in December, but could be forced up by rising oil prices, putting pressure on the Bank to increase the Bank Rate to 4% or higher.
The Bank held the rate at 3.75% last month, and makes its latest decision next week.
The current uncertainty means that this upward pressure doesn’t look likely to ease quickly.”
David Hollingworth, Associate Director at L&C Mortgages, warns that more lenders are likely to raise rates.
“Once we enter this cycle of lenders adjusting their rates, we know that it almost invariably results in others following suit.
“The current uncertainty means that this upward pressure doesn’t look likely to ease quickly, although there are signs that the market reaction is at least levelling off for now.”
