HALIFAX is the latest lender to raise its mortgage rates, with increases of up to 0.18% following increased wholesale funding costs. One broker said “the Chancellor needs to deliver genuine fiscal credibility and calm swap markets”.
From tomorrow, rate increases of up to 0.12% will apply to selected fixed rate products across Halifax’s homemover and first-time buyer ranges.
On the remortgage front, there will be a rate increase of 0.18% on the 60% LTV (loan-to-value) 2-year fixed rate product, with a £1,999 product fee.
The move, from one of the UK’s biggest lenders, follows a raft of other lenders increasing their rates yesterday, including Barclays, Santander and TSB.
Brokers speaking to Newspage said the outlook for borrowers is not looking positive.
Iain Thompson, Director at Evolve Finance, said: “Halifax joining the rate hike parade confirms that the high street mortgage market is under severe upward pressure.
“With global money markets driving up funding costs, even the UK’s biggest lenders are forcing borrowers to pay more, adding a sharp premium to fixed deals from tomorrow morning.
“For everyday homeowners, the 0.18% jump on low-leverage remortgages hits hard. It proves that having lots of equity is no longer an escape card from the rising tide, as banks aggressively squeeze margins across both first-time buyers and seasoned homeowners alike.
“The immediate next step for anyone facing a remortgage is to lock a deal in today. Sitting on the sidelines hoping for a sudden drop is a losing gamble.
“Most lenders let you secure a rate six months in advance, giving you a vital shield against these escalating weekly price hikes.”
Darryl Dhoffer, Founder at Bedford-based The Mortgage Geezer, added: “For homeowners already staring down punishing refinancing cliffs, this leaves zero breathing room.
“This is precisely why the upcoming Budget cannot come soon enough. The Chancellor needs to deliver genuine fiscal credibility and calm swap markets.
“Borrowers need tangible relief and fiscal stability, because right now, this Budget better be an absolute masterclass.”
Stephen Perkins, Managing Director at Norwich-based Yellow Brick Mortgages said “Halifax joining the growing list of lenders increasing fixed rates reinforces how quickly the mortgage market has changed direction”.
He continued: “Only recently, borrowers were becoming accustomed to lenders competing rates downwards, but higher wholesale funding costs have interrupted that trend.
“The increases themselves may look relatively small, but when several major lenders move within days of each other the competitive landscape can change quickly.
“It is another reminder that mortgage rates rarely move in a straight line, even when borrowers expect the next move in Bank Rate to be down.”
Craig Fish, Director at London-based Lodestone Mortgages, described the changes as small but said they tell “a bigger story”.
He continued: “Borrowers need to get used to this as the new norm, because cheap rates are not coming back anytime soon.
“Lenders are reacting to swap rate movements, and every time one of the big names moves, the rest tend to follow within days.
“For first-time buyers already stretching to afford a deposit, even a fraction of a percent added to a rate changes the monthly numbers meaningfully.
“My advice remains the same regardless of which lender moves first namely, get advice early, understand what you can actually afford at today’s rates, not last year’s, and don’t wait for a rate that may never come back.”
Aaron Strutt, Product and Communications Director at London-based Trinity Financial, said: “We have been waiting for Halifax to raise its rates, and I suspect Nationwide will be the next big lender to push up its prices.
“Many of the rate hikes we have seen so far have been smaller than expected and there are still a fair few two, three and five-year fixes priced between 4.5% and 4.6%, while Barclays still has its 3.99% 2-year tracker and other lenders are offering tracker rates that are only marginally more expensive.
“Hopefully this will be the end of the rate rises for a while, but there are certainly no guarantees.
“Multiple small mortgage price rises add up and ultimately deter people from buying homes, they also put pressure on the Bank of England to maintain the base rate rather than push it up.”
Doug Miller, Director at Bath-based Lansdown Financial Services, said: “For borrowers approaching the end of a fixed deal or currently looking to buy, the message is not to rush into a poor decision, but equally not to assume that waiting will automatically result in a cheaper mortgage.
“Securing a competitive rate now can often provide some protection, while in many cases there may still be an opportunity to switch to a better deal if rates improve before completion.”
Tracey Dixon, Owner at Cardiff-based Pure Mortgage and Protection, agreed: “Halifax’s latest increases are modest, but they reinforce how quickly the mortgage market can shift.
“Borrowers approaching a purchase or remortgage should secure a rate early, as waiting could prove costly.”
