NATIONWIDE has become the latest lender to deliver grim news to UK borrowers, following Santander and NatWest in increasing selected fixed rates by up to 0.35%.
In response to the latest round of increases, one broker said the mortgage hikes of the past 10 days or so have made the “Liz Truss period look like a blip”, while another said “don’t wait, don’t speculate, act”.
The Nationwide rate increases will apply to the lender’s First Time Buyer, Home Mover, Existing Customers Moving Home and Remortgage products, as well as its Switcher and Additional Borrowing ranges.
Liz Truss period
Rohit Kohli, Director at Romsey-based The Mortgage Stop, a broker, described the ongoing mortgage repricing as “exceptional”: “What we’ve seen in the last seven to ten days makes the Liz Truss period look like a blip.
“The speed, scale and frequency of the rate repricing has been exceptional, and from a broker’s point of view it’s rare to see so many lenders move this quickly and this aggressively in such a short space of time.
“For borrowers, affordability is being squeezed in real time. First-time buyers are losing ground almost by the day, and those remortgaging are finding that delays now come with a direct cost. As long as the war keeps driving uncertainty, I expect lenders to stay defensive and rates to keep rising.”
One broker, Stephen Perkins, Managing Director at Norwich-based Yellow Brick Mortgages, said “the bad news for borrowers just keeps piling up”.
He continued: “On Friday, Santander increased rates by up to 0.35%, earlier today NatWest followed suit and now Nationwide has delivered the same sizeable hikes.
“The rate increases we’re now seeing and their impact on potential payments are such that we may see home buying or moving plans shelved.
“Hopefully, this will be a short-term blip that will blow over once stability is restored in the geopolitical landscape. But for now the mortgage market is extremely volatile and lenders’ nerves are fraught.”
Hikes could continue
Katy Eatenton, Mortgage & Protection Specialist at St Albans-based Lifetime Wealth Management, said people need to act, and fast: “Until there is stability in the Middle East and certainty around the oil price, these rate hikes from lenders could well continue.
“If borrowers are due to remortgage within the next six months, they need to address things immediately to secure the lowest rates possible.”
Adam Stiles, Managing Director at London-based Helix Financial Partners, described the hikes as “hefty”.
He said: “Lenders have been left second-guessing the extent of the volatility in this market with not only regular rate increases, but hefty increases. A jump of 0.35% in rate is by no means insignificant.”
Lock in
Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, said: “Unfortunately, there have been more mortgage rate increases today due to the threat of inflation brought on by the Middle East conflict.”
He added that “it may be prudent to lock into a deal just in case rates go higher, as you can always change pre-completion”.
Craig Fish, Director at London-based Lodestone Mortgages, said swap rates are surging on the back of Middle East tensions and markets are rowing back hard on Bank of England rate cut expectations.
He continued: “Lenders are repricing fast and furiously to protect margins. It feels uncomfortably like 2022 all over again. The advice right now is simple: don’t wait, don’t speculate, act.”
