Financial Times - UK mortgage rates rise again after resumption of Middle East hostilities

Several big UK lenders this week began raising their mortgage interest rates, putting the brakes on recent falls in costs for borrowers and prompting brokers to warn of further price rises to come.  Barclays, NatWest, Nationwide, Coventry Building Society and Virgin Money this week raised their fixed rates — some by as much as 0.35 percentage points — adding to the costs of taking out or remortgaging a home loan.

Aaron Strutt, product director at broker Trinity Financial, said further price hikes “seemed likely”.  But he added that though the pace of fixed-rate price reductions had slowed significantly, there were still lower-priced options available. “Many borrowers are still taking two-year fixes priced around 4.3 per cent and tracker mortgages below 4 per cent, particularly if they expect the Bank of England to cut the base rate from 3.75 per cent this year or they need flexibility.”

Nationwide lowers six-times-income mortgage threshold to £75,000

Mr Strutt added: “This means the higher income multiple is available to lots more people, even though many would prefer not to be taking such a large income stretch.”

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