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Major lenders increase mortgage rates in a ‘hurricane of rises’ – see the full list and how you can get the best deal
Mortgage rates are edging upwards - we explain what action to take now
BORROWERS are being hit with a "hurricane of rises" as almost half a dozen lenders prepare to hike mortgage rates.
NatWest, Accord, HSBC, The Co-Operative Bank and Barclays have all announced they will be upping their rates over the coming days.
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It follows an increase in swap rates, which underpin fixed-rate mortgages, leading to lenders to adjust their rates.
UK interest rates currently sit at a 15-year high of 5.25% after hikes by the Bank of England (BoE) in an effort to quash stubbornly hight inflation.
Experts had predicted rate-setters at the BoE would start cuts in June, but said they are now expecting this to happen in the summer.
Barclays announced its second rate rise in the space of seven days - with increases of up to 0.2 percentage points.
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The changes, which will come into effect tomorrow, will impact residential purchase, remortgage and rewards ranges.
HSBC will also be upping some of its two and five-year fixes tomorrow, but the exact rates are yet to be confirmed.
NatWest is also increasing rates on several of its two and five year switched deals by 0.1 percentage points.
Accord Mortgages said some rates would be going up by up to 0.4 percentage points.
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Meanwhile, the Co-Operative Bank is increasing some deals by 0.38 percentage points.
But in a sigh of relief, some will be reduced by up to 0.07 percentage points.
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The average two-year fixed residential mortgage rate today is 5.82%, according to to financial website Moneyfacts.
This is down from an average rate of 5.83% on Friday.
On the other hand, the average five-year fixed residential mortgage rate today remains at 5.4%.
Stephen Perkins, managing director at Yellow Brick Mortgage, said: "A swirling hurricane of rate rises is shaking the mortgage market this morning, in a disastrous start to the new week.
"With swap rates having increased in recent days from the lack of expectation of any base rate reduction anytime soon, the "higher for longer rhetoric" is biting hard."
Lewis Shaw, owner and mortgage expert at Shaw Financial Services, said the increase in rates could have an impact on the property market.
He added: "With fixed rates on the march upwards again, we could easily see the property market get quiet right when it’s meant to be in full swing.
"So far this whole higher-for-longer narrative is coming true much to the dismay of those who want to move and can’t find a buyer and buyers who want to purchase but can negotiate the price down to something affordable. It’s all fun and games."
How do higher mortgage rates affect my payments?
HIGHER mortgage rates make monthly repayments higher.
Over two years ago, you could get a two-year fixed rate mortgage for 0.99%.
On a £100,000 mortgage taken over 25 years, this would have meant monthly repayments of £376.
If you were to borrow £100,000 over the same term today at the average two-year fixed rate of 5.28%, your monthly repayments would be £601.
That's an extra £225 a month and it's forcing borrowers to take longer deals.
What does it mean for mortgage holders?
Lenders are primarily upping their fixed mortgage deals instead of their standard variable and tracker deals right now.
Around 1.6million households are currently on fixed mortgage deals, which expire later this year.
This means that over a million households face the prospect of increasing monthly payments by hundreds of pounds.
How to get the best deal on your mortgage
If you're looking for a traditional type of mortgage, getting the best rates depends entirely on what's available at any given time.
But there are several ways to land the best deal.
Usually the larger the deposit you have the lower the rate you can get.
If you're remortgaging and your loan-to-value ratio (LTV) has changed, you'll get access to better rates than before.
Your LTV will go down if your outstanding mortgage is lower and/or your home's value is higher.
A change to your credit score or a better salary could also help you access better rates.
And if you're nearing the end of a fixed deal soon it's worth looking for new deals now.
You can lock in current deals sometimes up to six months before your current deal ends.
Leaving a fixed deal early will usually come with an early exit fee, so you want to avoid this extra cost.
But depending on the cost and how much you could save by switching versus sticking, it could be worth paying to leave the deal - but compare the costs first.
To find the best deal use a to see what's available.
You can also go to a mortgage broker who can compare a much larger range of deals for you.
Some will charge an extra fee but there are plenty who give advice for free and get paid only on commission from the lender.
You'll also need to factor in fees for the mortgage, though some have no fees at all.
You can add the fee - sometimes more than £1,000 - to the cost of the mortgage, but be aware that means you'll pay interest on it and so will cost more in the long term.
You can use a mortgage calculator to see how much you could borrow.
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Remember you'll have to pass the lender's strict eligibility criteria too, which will include affordability checks and looking at your credit file.
You may also need to provide documents such as utility bills, proof of benefits, your last three month's payslips, passports and bank statements.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
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