What is happening to mortgage rates?

by Aaron Strutt

Jun 20 2023

Banks and building societies have continued to increase the price of their mortgages, with Halifax and Virgin Money being the latest big banks to confirm they are raising mortgage rates.

Some lenders have either temporarily withdrawn their mortgage products while others have significantly raised their new business and existing customer rates.

The price differential between the lenders is often quite large, so our brokers are working hard to secure our clients the best possible rates. Frustratingly many lenders are not giving us much notice that their mortgage rates will be withdrawn. 

Figures from Moneyfacts show that average mortgage rates continue to soar as the average two-year fixed mortgage has now passed 6.00%, while the average five-year fixed rate is 5.67%. 

Average mortgage rates across the big six lenders are lower according to data from Uswitch*:

*Nationwide, Santander, HSBC, Halifax, Barclays Bank, NatWest, and Lloyds Bank. Data provided by Uswitch.

Which lenders have changed rates?

Virtually all the lenders have been pushing up prices, but here is a selection of some of the latest changes.

Accord Mortgages made various changes, although some rates have gone up by up to 0.69%. Barclays has raised fixed rates for existing customers by 0.30%, while Gen H has raised fixed rates by up to 0.42%. Bank of Ireland UK, Leek Building Society, and Nottingham BS have lifted selected rates.

The 'Income Flex' deals at Hinckley & Rugby BS are no longer available; neither are some of its buy-to-let discounted variable rates. TSB pulled its two, three and five fixed-rate mortgages with £995 arrangement fees.

Nationwide Building Society has made numerous rate increases, while Clydesdale Bank is not offering many new business rates.  Santander has changed the large loan range by increasing the maximum loan from £3m to £5m. However, the maximum loan-to-value will decrease from 70% to 60% meaning borrowers will need a larger deposit. 

One private bank has said that due to the SWAP rate markets continuing to fluctuate significantly, it has decided to withdraw its fixed rates. It still offers tracker rate mortgages but may offer fixes on a "case-by-case basis". 

Why are rates going up so much?

The Times reports the government's two-year borrowing costs have risen above 5% for the first time in 15 years amid mounting expectations that the Bank of England will lift interest rates again this week as it tries to contain inflation.

It says: "Gilt yields, which move inversely to prices, have soared in recent days" as traders bet that the Monetary Policy Committee will need to raise rates further and keep them higher for longer than anticipated. The latest base rate decision will be announced on Thursday when it is expected to be increased again by at least 25 basis points to 4.75%. This would represent a 13th consecutive increase in borrowing costs.

How can Trinity Financial help?

Trinity Financial's brokers are working hard to tell our clients when rates are going up and to get applications in on time to secure their rates.

We are still speaking to first-time buyers, home movers, and many people whose mortgage is coming to an over the next few months.

Call Trinity Financial on 020 7016 0790 for expert mortgage advice or book a consultation 

The information contained within was correct at the time of publication but is subject to change

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