Should you fix your mortgage now or wait? More mortgage lenders raise rates

Mortgage rates have become more volatile again, with several major lenders increasing fixed rates as wholesale funding costs rise. While more lenders have raised rates, most changes so far have been relatively small.

Barclays is increasing many of its fixed mortgages, and one of its two-year fixes at 60% loan-to-value is rising from around 4.60% to 4.75%. TSB is raising selected residential fixed rates by 0.15 percentage points from 8 September, and Santander has also pushed rates up by up to 0.25%. Halifax and Nationwide are likely to raise theirs soon, as their rates undercut most other lenders.

Despite the price rises, Santander's lowest fixed rate is just over 4.5%, and Barclays is still offering a sub-4% two-year tracker mortgage.

Why are mortgage rates rising? 

Fixed mortgage rates are heavily influenced by swap rates, which have risen sharply in recent weeks. When swap rates increase, lenders often respond by raising fixed mortgage pricing to protect their margins.

The Bank of England is set to hold rates this month, according to Arbuthnot Latham, but is fully priced to hike by year-end given the underlying inflationary pressures, with speculation growing around fiscal policy ahead of next month’s Budget given the constraints of the UK's public finances and high levels of government debt across the world.

Should you fix your mortgage now or wait?

Borrowers who need a mortgage soon should be cautious about waiting for rates to fall. 

If you are buying a property or your current mortgage deal is ending within the next few months, securing a competitive rate now may provide useful protection if lenders continue increasing prices. Many remortgage borrowers can reserve a new mortgage several months before their existing deal expires. If rates later fall, it may be possible to switch to a cheaper product before completion.

Secure a competitively priced mortgage rate while it is available

Aaron Strutt, Product Director at Trinity Financial, says: “Borrowers should be careful about waiting for fixed mortgage rates to fall, especially if they need a mortgage soon. Swap rates have risen sharply, and major lenders are already raising prices. It can make sense to secure a competitive rate while it is available and review it again before completion if cheaper deals return.

“It is often easier to secure a rate and replace it later than wait and find the deal you wanted has become more expensive. In a volatile mortgage rate market, rates can go up a few times in the space of a week or two, so if you do not watch the market you could end up paying more than necessary potentially for years, especially if you take a five-year fix.”

Speak to Trinity Financial

Trinity Financial's brokers can compare the latest fixed, tracker and remortgage deals and help borrowers decide whether to secure a rate now or wait.

Call Trinity Financial on 020 7016 0790 to secure a larger mortgage loan, 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.

Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage