Three major lenders have raised their mortgage rates in the past 24 hours, adding to growing concerns among borrowers about the rising cost of home loans.
Halifax, Accord, and Santander are the latest banks to adjust their rates upwards. This move comes as swap rates – which play a key role in determining how much it costs banks to borrow money for lending – have gone up, and expectations of future Bank of England base rate cuts have weakened.
Halifax has made changes to a number of their mortgage products. The lender has increased interest rates on selected two, three, and five-year fixed-rate deals by as much as 0.16%.
Accord Mortgages followed suit, raising their rates on various products by up to 0.15%. Meanwhile, Santander increased some of their mortgage rates by a maximum of 0.1%.
These changes, though relatively minor individually, contribute to a trend of gradually rising mortgage costs, which industry experts warn may become more frequent over the coming weeks.
Andrew Montlake, chief executive at mortgage brokerage Coreco, described the situation as “death by 1,000 increases”. He noted that lenders are cautiously reversing the rate reductions made earlier in the year as they respond to changes in swap markets.
Montlake emphasised that this trend is likely to continue, stating: “Lenders are slowly but surely pulling back their earlier cuts, reacting to the latest movement in swap rates.”
He also warned homebuyers that trying to outguess the market might not be wise. “In a volatile market like this, it’s better to lock in a rate sooner rather than later. Waiting could mean missing out on your ideal property or paying more down the line,” he told Money via Newspage.
This sentiment was echoed by Justin Moy, managing director at EHF Mortgages, who highlighted that more rate hikes could be on the horizon.
Moy stated that even though the increases are currently modest, they signal a wider issue in the mortgage landscape. Lenders working with very narrow profit margins are quick to react to any instability in the swap markets.
He warned that borrowers should be prepared for similar announcements from other major lenders in the days ahead, as the trend looks set to continue.
“These small adjustments might not seem significant on their own,” Moy said, “but when applied across the market, they have a noticeable impact on affordability for many households.”
He added that no single lender is keen to be seen as offering the lowest rates, which would bring in a high volume of applications that might strain their resources.
In a climate where every fraction of a percentage point matters, borrowers are being advised to act swiftly if they find a suitable deal.
The mortgage market remains extremely sensitive to external pressures, including inflation, central bank policy, and financial market performance.
As a result, homeowners and prospective buyers alike are urged to stay informed and consult with mortgage advisers regularly to avoid being caught off-guard by sudden changes.
Three Major Banks Raise Mortgage Rates
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