Barclays, Nationwide, Coventry Building Society, and Virgin Money had each announced mortgage rate increases earlier this week.
David Hollingworth (pictured right), associate director at L&C Mortgages, said that while rate cuts had generally driven the market in a positive direction in recent weeks, borrowers hoping for an ongoing downward trend would need to reconsider, with a growing number of lenders announcing imminent increases.
“The resumption of hostility in the Middle East has caused further uncertainty in financial markets, as the threat of higher interest rates returns,” Hollingworth said. “That’s affecting lenders’ funding costs and has already resulted in several major lenders announcing that they have increased fixed rates or are about to.”
Hollingworth warned that multiple lenders moving in quick succession typically signals others will follow, and urged borrowers who had been waiting for further reductions to act promptly to avoid missing some of the lowest available rates.
“Although many increases have so far been slight, others are chunkier,” he noted. “For example, Nationwide’s leading two-year fix for purchases at 4.24% has now lifted to 4.59%, an increase of 0.35% equating to an uplift in monthly payments of almost £40 per month or £480 per annum.