UK’s biggest lender ups several of its fixed rates for first time buyers and movers by 0.2%
Halifax is increasing several of its mortgage rates, following other major lenders upping theirs.
The UK’s biggest lender is upping several of its fixed rates for first time buyers and movers by 0.2 per cent while increasing its three-year fixed rate remortgage products by up to 0.15 per cent.
It follows other major lenders including Barclays, which increased rates by 0.2 per cent this week.
Santander, HSBC, TSB and Leeds Building Society also all announced they were increasing costs on their home loan deals last week.
The rise is largely due to rising swap rates, which follow predictions for where the Bank of England base rate will go in the future, with mortgage lenders basing their pricing on these.
They have been increasing despite expectations that there will be an interest rate cut when the Bank’s Monetary Policy Committee (MPC) meets in early February.
Nick Mendes of brokers John Charcol said: “Uncertainty remains in the market, while financial markets are currently expecting just two interest rate cuts in 2025, arguments for further cuts remain.
“Unfortunately, this hasn’t fed through into market pricing. An important moment for the market will come on 26 March, with the release of the Office for Budget Responsibility report. This report will play a key role in shaping perceptions of the government’s fiscal credibility.
“A positive reception could help stabilise gilt yields and ease upward pressure on swap rates. However, if the report triggers further doubts about economic policy, this will likely result in rates climbing further.”
Not only does this spark bad news for homeowners, but it will also be a blow for the Chancellor Rachel Reeves and the Government who promised to ease bill pressures for households across the country.
One of Prime Minister Sir Keir Starmer’s key targets for the Government was to improve living standards – something that would be measured by real household disposable income.
David Hollingworth of L&C Mortgages said: “Market rates shifted in the opening weeks of the year as inflationary pressure saw the number of expected rate cuts being questioned. That saw a flurry of increases, albeit relatively small, in fixed rates from a range of lenders.
“However, the moves weren’t so widespread as to see the whole market moving and some including Barclays and Halifax resisted repricing until now. Holding out this long will have been helped by the fall in the rate of inflation which has helped to reverse some of the swap market increases, which are a good indicator of where fixed-rate pricing may head.
“These changes may well have a knock on [effect] for others as it will push them higher up the best-buy tables and may apply increasing pressure on service as well as pricing.”
He added this could lead to others tweaking their prices but this “shouldn’t signal big changes and fixed mortgage rates currently look like they should stabilise.”
Despite many lenders upping rates, several have also cut at the same time.
Coventry Building Society is reducing rates as is Santander and Accord.
Aaron Strutt of brokers Trinity Financial said: “It is quite surprising that many more of the lenders have not pushed their rates up based on the economic uncertainty we have had recently. We still have access to rates like Nationwide’s 4.17 per cent two-year fix and NatWest’s 4.07 per cent five-year fix.”
For anyone nearing the end of a fixed-rate term or considering a new mortgage deal, brokers say it is vital to act quickly.
Consulting a mortgage broker is highly recommended, as they can provide tailored advice and access a wider range of products than those available directly to consumers. Brokers can also help borrowers decide whether to secure a rate now and move onto a new rate should the market improve.
Securing a fixed rate now, even if rates feel high compared to previous years, could offer valuable protection against potential further increases in the coming months.
Acting decisively will provide peace of mind and stability in what remains a highly uncertain environment.