Santander, HSBC and TSB are the latest major lenders to announce a mortgage rate increase from November 12.
TSB confirmed that two- and five-year fixed rates for first-time homebuyers and movers have increased by up to 0.30%; and the two- and five-year fixed remortgage 0-80% LTV rates have increased by up to 0.30%
Santander changes include increases of a maximum of 0.29% on selected standard fixed rates for homes for purchase, refinancing a mortgage and green products. Increases of up to 0.20% on all fixed interest rates for large loans and increases of up to 0.26% on all fixed interest rates for new construction.
HSBC has confirmed it will also increase rates, but has not yet specified what the increases will be.
Commenting on the rate changes, Nick Mendes, technical mortgage manager at John Charcol, said: “HSBC has announced a second rate hike in just two weeks, following a similar move by Santander to increase earlier this week.
“While many lenders have chosen to maintain their existing rates to maintain business volumes and service standards, those offering competitive pricing have been forced to adapt, likely due to application levels. This influx often increases service levels, requiring rapid rate changes to effectively manage demand.
Mendes said that, adding to the pressure, swap rates had risen, adding to the need. “The combination of market dynamics and rising swap rates highlights the difficult landscape that borrowers find themselves in.”
Decision on bank interest rate
John Fraser-Tucker, head of mortgages at Mojo Mortgages, pointed out that the move by lenders may seem counterintuitive to some, given the Bank of England’s recent decision to cut the base rate to 4.75% – the second such cut. year.
“While the Bank of England’s decision to cut bank rates last week could lead some to expect blanket cuts in mortgage rates, it is important to understand that the mortgage market does not always move in perfect sync with the Bank of England’s rate cuts England. base rate decision.
“Fixed rate mortgages in particular are influenced by a complex range of factors that go beyond just bank interest rates. These may include the lender’s own financing costs, their views on future economic conditions, competitive position in the marketplace and even their internal targets for new customers.
“In the case of Santander, their decision to increase some fixed interest rates despite the recent bank rate cut could be driven by some of these factors
“Lenders continually assess risks and adjust their offerings accordingly. Sometimes this means we see rate increases even in an environment where we would expect decreases.”