As lenders are forced to reprice following the Bank of England’s decision to increase rates to 5% and volatility in money markets, Nick Mendes (pictured) of John Charcol has warned that could be a few weeks of product changes ahead.
Several lenders, including Santander, have adjusted their offerings as they try and adapt to the changing market conditions.
But frequent product changes have been drawing the ire of brokers who have been calling on lenders to provide more notice before making withdrawals and changes.
Earlier today data from Moneyfacts revealed that mortgage rates were now at a seven-month high – rates are now higher than during the fallout of the Kwarteng/Truss mini-Budget.
Mendes, mortgage technical manager at John Charcol, had this to say: “Santander latest fixed price increase highlights how frequently lenders have to reprice products at the moment,
“Each week Swap rates continue to increase as markets remain unsettled on the outlook for inflation falling in the UK as a result pricing in higher base rates over a longer period.
“Mortgage holders will see Moneyfacts data on average fixed rate increases each week,
“The average 2-year fixed residential mortgage rate lifted 4 basis points to 6.23% today (Monday 26th June) from Friday, data from Moneyfacts shows, a seven-month high.Â
“The average 5-year fixed residential mortgage rate also rose by 3bps to 5.86% since the end of last week.
“It’s important to bear in mind these are averages and not reflective of the best deals on the market.
“For example, Furness offer a 2-year fix at 4.49% as well as a 5-year at 4.19%.
“How long these types of deals remain on the market remains to be seen.
“I think we are going to see a few weeks of lenders second guess themselves and making continuous product changes.”
