HALIFAX, often referred to as the “barometer” of the high street by brokers, is increasing mortgage rates across all its 2-, 3- and 5-year fixed and tracker Purchase and Remortgage products from tomorrow, Tuesday 10 March — in response to ongoing geopolitical tensions.
The lender will also be increasing rates on selected products across its Product Transfer and Further Advance ranges, as events in the Middle East create serious inflation fears due to the soaring oil price, with swap rates rising and markets now betting on a base rate rise by the Bank of England this year.
Halifax follows other lenders in repricing up, including Barclays earlier today, while some, such as the Saffron Building Society, are temporarily withdrawing all fixed rate new business rates across selected buy-to-let and residential loans due to ongoing uncertainty and jitters.
Meanwhile, Fleet Mortgages has announced that, “due to continued market volatility, we are temporarily withdrawing all fixed rate products from 5pm tonight”.
2022 all over again
Riz Malik, Independent Financial Adviser at Southend-on-Sea-based R3 Wealth, said: “Lenders are panicking as markets are moving at an alarming pace. The spike in oil has spooked the markets, and gilt rates have soared.
“It’s carnage in the mortgage market right now and is starting to feel like 2022 all over again. I pray this is short-lived, otherwise housing and households will suffer significantly.”
Louis Mason, Communications Director at London-based Oportfolio Mortgages, said Halifax tends to set the tone for the wider market, so when it moves, other lenders will often follow.
He continued: “What we’re seeing now isn’t just a knee-jerk reaction but lenders rapidly repricing to keep pace with the swap rate volatility of the past week.
“That doesn’t necessarily mean rates will spiral, but it does suggest we could see short-term pricing continue to edge upwards until markets settle.
“For borrowers, the key message is speed and flexibility. If you’re in the market, securing a rate quickly can provide valuable protection because most offers can be revised down if pricing improves, but not up once locked in.”
Ripples reaching British shores
Darryl Dhoffer, Founder at Bedford-based The Mortgage Geezer, also urged people to secure a rate now.
He said: “As conflict in the Middle East brings global shipping to a standstill and sends the oil price above $100, the ripples are now reaching British shores and the country’s borrowers.
“Driven by the threat of rising inflation and a spike in swap rates, mortgage rates are officially on the rise.
“Halifax, alongside major peers like HSBC and Nationwide, has now started to hike fixed rate deals. The era of falling rates is no more. With energy prices climbing, securing a deal now may be a wise course of action.”
It’s a view shared by Jamie Alexander, Mortgage Director at Romsey-based Alexander Southwell Mortgages, who said: “Halifax increasing rates is a clear signal that the calm we saw in mortgage pricing may be fading. Swap rates have moved higher in recent days, and lenders are reacting quickly to protect margins.
“For borrowers, it’s a reminder that mortgage rates can change quickly when financial markets become unsettled. Anyone considering a purchase or remortgage may want to secure a rate sooner rather than later, as most lenders will still allow a switch to a cheaper deal if pricing improves before completion.”
Consider securing a rate
Harps Garcha, Director at London-based Brooklyns Financial, added: “We’ve woken up to a market where lenders are withdrawing mortgage rates and returning with higher pricing, while some are stepping back entirely until market conditions stabilise.
“It’s not a time for panic, but borrowers should consider securing a rate sooner rather than later. What’s important is that if rates do fall before completion, most lenders will allow borrowers to switch to the lower rate.”
David Stirling, Independent Financial Adviser at Belfast-based Mint Wealth, also said “now is the time to act and lock in a rate if possible”.
He continued: “With a polycrisis in the world unfolding, lenders are pulling up the drawbridge and withdrawing rates, offering less competition for borrowers.
“Halifax is a behemoth of a lender and this signals the start of a period of turbulence in the money markets. The pressure in the barometer is rising quickly.”
Photo by Deng Xiang on Unsplash
