Big six lenders up mortgage rates ahead of rate rise announcement - brokers react

Santander, NatWest and HSBC are among the lenders who have increased mortgage rates this week ahead of the MPC's interest rate announcement on Thursday.

Related topics:  Mortgages
Rozi Jones
21st September 2022
calculator rates mortgage house
"Lenders are regularly upping their rates at the moment but when you see them all doing it on the same day you know something must be up."

Santander for Intermediaries has increased new business and product transfer rates by up to 0.80%. The largest increase is to a 90% LTV two-year fixed rate which has risen by 80bps to 4.89%. Other high-LTV and Help to Buy products have increased by 0.70%.

NatWest has announced rate hikes of between 20-30bps across its residential range, with the largest increase to a 90% LTV five-year fix, and HSBC has increased residential and buy-to-let rates by up to 20bps.

Ashley Thomas, director at Magni Finance, said: "On Tuesday, a number of lenders announced their rates are increasing, with the highest, at the time of writing, a chunky 0.80% by Santander for a 90% LTV remortgage product. That's a material increase and shows that the days of ultra-low rates are now over. I would recommend fixing your rate as soon as possible, as this is a sign that banks are expecting a potentially significant rate increase on Thursday. I wouldn't be surprised to see more lenders act before then. The mortgage market is about as fast-moving as it could be right now and anyone seeking to lock into a fixed rate needs to act right now. The clock is ticking in the run-up to what could be a very big and expensive Thursday."

Lewis Shaw, founder and mortgage expert at Shaw Financial Services, commented: "We've been sent communications from lenders with increases of as much as 0.8% from major high street lenders. With others following suit, trying to get ahead of the base rate rise, we'll see much more of this in the next 48 hours. Lenders are pre-emptively hiking rates because they don't want to get caught short, stuck at the top of sourcing lists, and scrambling to reprice. So far, I've seen NatWest, HSBC, Coventry, and Santander all upping their fixed rates within the next couple of days. The writing is on the wall for a significant base rate rise, maybe by as much as 0.75%, given the details that have already been sent through. Borrowers should buckle up."

Imogen Sporle, head of regulated and term finance at Finanze, said: "Lenders are regularly upping their rates at the moment but when you see them all doing it on the same day you know something must be up. I think lenders are just so used to the base rate rises being announced in the past few months that they just know it will happen again and rather than have a mad rush on Thursday to up their rates they are pre-emptively doing it now. Borrowers are very aware of the rapid rate rises and product withdrawals, and those whose fixed rates are coming to an end or want to refinance within the next six months need to do it now rather than later (providing you don’t have early repayment charges) because rates are only going to keep going up."

Imran Hussain, director at Harmony Financial Services, added: "I have seen announcements already from several lenders including Natwest, Santander, HSBC and Coventry. It's not just specialist lenders announcing rate increases from between 0.35bps to 0.80bps, this is pretty much everyone looking at their current offering and trying to stay in line with the market. We should get used to this for at least the next 18 months. With the average 2- and 5-year fix now above 4%, I can see this going over 5% before the year is out so anyone seeking to remortgage needs to act quickly as, right now, rates are gone faster than a toupee in a hurricane."

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