High street banks Barclays and Virgin Money, as well as Coventry Building Society and Accord, put up their residential rates today (March 10).
Barclays emailed brokers yesterday afternoon ahead of introducing rate increases of up to 0.32 percentage points across two and five-year fixed mortgages today.
Mortgages are getting more expensive.Aaron Strutt, Trinity Financial
Virgin Money raised residential rates by a lesser 0.20 percentage points, while Accord applied increases of up to 0.40 percentage points .
Coventry is also set to increase all its standard two, three, and five-year rates for new customers on Monday (March 13).
Director at Trinity Financial, Aaron Strutt, said while rates hovering around 4 per cent a few days ago might have seemed achievable, now 4.25 per cent is looking more likely for a good deal.
“Mortgages are getting more expensive,” said Strutt.
“This is not great for borrowers, but it is how the market goes. Higher rates go, then this puts more borrowers off taking out mortgages. Then rates are cut again to stimulate the market.”
Strutt reckons mortgage rates are unlikely to settle until next year.
These latest lenders to notify us of their increases won't be the last.Lewis Shaw, Riverside Mortgages
Later this month, the Bank of England is expected to raise the base rate to 4.25 per cent. Predictions are that the base rate will remain at this level before gradually being reduced towards the end of this year.
Alongside increases across fixed rates, Strutt is also concerned about standard variable rates. Some lenders’ standard variables currently sit in 8 per cent territory.
“These rates are pretty shocking if you’re stuck on them,” said Strutt. The London-based broker said it is “believable” that people could end up on these if they miss their product transfer windows.
Earlier this week, mortgage brokers were left frustrated after TSB gave them just 25 minutes warning of an increase to its interest rates.
Brokers were emailed by the lender at 12.35pm on March 7, to be informed that rates would be increased by as much as 0.20 percentage points from 1pm.
Owner of Riverside Mortgages, Lewis Shaw, told FTAdviser brokers are getting less and less notice for rate changes.
Not being organised will now start to be a costly exercise for mortgage holders.Lewis Shaw, Riverside Mortgages
“Now that we're into another rate-rising cycle, it's important that people look to get advice sooner rather than later,” said Lewis.