Top six mortgage lenders all raise rates within 48 hours as Barclays hikes fixed deals

Top six mortgage lenders raise rates within 48 hours as Barclays hikes fixed deals

Barclays has become the latest major mortgage lender to increase its fixed rates, meaning the UK’s six biggest mortgage providers have all announced rate rises within the space of around 48 hours.

From Wednesday 16 September, Barclays is increasing rates on a selection of residential purchase mortgages. The bank only increased its fixed rates a few days ago on the 11th September. 

One of the most noticeable changes is to its market-leading two-year fixed rate, which will increase from 4.55% to 4.75%. The deal has a £899 arrangement fee and requires a 40% deposit.

The changes come after HSBC, Santander, Nationwide, NatWest and Halifax also moved to increase mortgage rates as lenders respond to higher wholesale funding costs.

Mortgage pricing has already been moving upwards during September as swap rates have increased. Major lenders including HSBC, NatWest, Santander, Lloyds/Halifax and Barclays had already made increases to fixed mortgage pricing earlier in the month.

Santander announces some of the biggest mortgage rate rises

Santander's latest changes have been particularly significant, with some mortgage rates increasing by as much as 0.45 percentage points.

Nationwide has also increased selected fixed rates by as much as 0.30 percentage points, while HSBC has raised pricing across a wide range of residential mortgages, including first-time buyer, home mover and remortgage products.

The speed and scale of the changes mean borrowers searching for a mortgage today are seeing a very different market from only a few days ago.

Aaron Strutt, Product Director at Trinity Financial, says: “Barclays' rate rises were widely expected because all of the other major lenders had already announced increases.

“It is unusual for so many of the biggest lenders to hike their mortgage rates in such a short space of time, and it highlights how challenging mortgage funding conditions have become.

“Barclays' market-leading 4.55% two-year fix is increasing to 4.75%, while lots of its other rates are now moving above 5%. We had hoped there would continue to be more sub-5% fixed rates available despite the economic tensions and higher funding costs.

“Santander's increases of up to 0.45% have been among the largest so far, although for the moment there are still two-year fixed rates available around the 4.75% mark.”

Barclays 3.99% tracker remains a standout deal

One particularly interesting point is that Barclays does not appear to be withdrawing its 3.99% two-year tracker mortgage as part of these changes.

The 3.99% tracker has been one of the most competitively priced tracker mortgages available and is significantly cheaper initially than many of the new fixed rates. Barclays originally launched the Premier two-year tracker at 3.99%, available up to 60% loan-to-value with a £999 fee.

This widening gap between tracker and fixed mortgage pricing could prompt more borrowers to consider variable-rate options.

More borrowers are going to be looking at tracker mortgages because some of them are now considerably cheaper than fixed rates.

The trade-off is that tracker repayments can rise if the Bank of England increases the base rate, whereas a fixed mortgage provides certainty over monthly payments. Borrowers need to weigh up the initial saving against the risk of rates moving higher.”

Expectations for Bank Rate have also become more uncertain. Recent economic forecasts suggest the Bank of England may keep rates higher for longer as policymakers assess inflation and energy-price pressures.

Should you secure a mortgage rate now?

Borrowers buying a property or remortgaging may want to check available mortgage rates sooner rather than later.

Mortgage lenders can change or withdraw deals at short notice, and the recent wave of repricing demonstrates how quickly the best-buy tables can change.

Trinity Financial's brokers have access to mortgages from high-street banks, building societies and specialist lenders and can compare fixed, tracker and other mortgage options.

If you are buying a property, moving home or approaching the end of your current mortgage deal, contact Trinity Financial to discuss the latest mortgage rates and find out which lenders are most suitable for your circumstances.

Mortgage rates and lending criteria can change at short notice. The most suitable mortgage will depend on your individual circumstances.

Speak to Trinity Financial

If you are buying a property and would like to understand how much you could borrow and what your monthly mortgage payments may be, contact Trinity Financial to discuss your options with one of our mortgage brokers.

Call Trinity Financial on 020 7016 0790 to secure a mortgage, book a consultation, or complete our mortgage questionnaire. 

The information contained within was correct at the time of publication but is subject to change. It is for general information purposes and is not advice.

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