A worrying number of mortgage providers have hiked the cost of fixed-rate deals over the last seven days. Act now before ultra-low rates disappear.
As many as 10 mortgage providers, including lending giants Nationwide and Halifax, have increased their mortgage rates in the last week.
It comes after Mark Carney, the Bank of England governor, hinted that the Base Rate could rise as soon as next month.
That warning could signal the beginning of the end for ultra-low mortgage rates, which many borrowers have become accustomed to over the last decade.
In fact, many millions of homeowners will never have experienced a rate hike since buying, and so could be in for a shock.
The lenders hiking rates
Nationwide hiked its cheapest two-year fixed-rate deal on Thursday 28 September by 0.25% from 1.19% to 1.44%.
Meanwhile, Halifax increased a number of fixed-rate deals by up to 0.2% yesterday. Its two-year fixed-rate mortgage that was available for 1.96% is now priced at 2.16% for those with an 85% loan-to-value.
Last week, Skipton Building Society put up the rates of the majority of its two- and five-year fixed-rate deals by up to 0.34%.
Other lenders that have hiked rates over the last seven days include Aldermore (up to 0.1%), Santander (up to 0.15%), Leeds Building Society (up to 0.3%), Coventry Building Society (up to 0.2%), Newcastle Building Society (up to 0.3%) and West Bromwich Building Society (up to 0.3%).
Experts say that this sort of movement could ‘snowball’ and other lenders may rush to reprice deals in response.
Why is this happening?
The Bank of England Base Rate was cut from 0.5% to a new record low of 0.25% in August last year to help shore up the economy following the EU referendum result.
The Base Rate plays a key role in the rates set for borrowing and saving. When it is low, it is cheaper for lenders to borrow, which is passed onto customers in the form of cheaper mortgages and loans.
However, Mark Carney has warned that he expects interest rates to rise as early as November if the economy remains stable, which would likely mean borrowing will become more expensive.
"If the economy continues on the track that it's been on, and all indications are that it is, in the relatively near term we can expect that interest rates will increase," he said.
The next Monetary Policy Committee meeting is scheduled for 2 November and if voting members agree the rate may be pushed up, though this is unlikely to be an extreme change.
"We're talking about just easing the foot off the accelerator to keep with the speed limit of the economy and so interest rate increases when they come - when and if they come - will be to a limited extent and gradual," Mr Carney said.
Act now to lock into a good deal
If you are thinking of taking out a mortgage or remortgaging you should act soon to take advantage of record-low rates.
You can compare deals on fixed-rate as well as variable rate deals using the loveMONEY mortgage comparison centre.
Be the first to comment
Do you want to comment on this article? You need to be signed in for this feature