5-year fixed mortgage rates exceeding 6% for the first time since November 2022 is not welcome news for lenders or landlords alike.
The increasing rise in interest rates is likely to have a significant knock-on impact on renters who may over time face higher payments when landlords seek to renew tenancies at higher levels in a bid to soften the burden they themselves may be feeling.
Despite the worrying headlines for homeowners, recent Nationwide data shows the number of mortgage applications have surprisingly not declined, despite rates almost doubling since this time last year.
While rates are going up rapidly, what we are experiencing is a reduction in mortgage products available on the market, the volatility in number of products available will reduce when the markets eventually start to stabilise. There is strong hope that we will see change on the run up to the end of the year.
In these turbulent times, what is needed more than ever is speed to delivery of loans, removing all barriers and stress for landlords.
It is essential for banks and financial institutions to remember the impact fluctuating rates have on the end customer and provide transparent, customer centric lending and communication with customers.
Banks should be looking for ways to better support their customers and automatically update their rates to a more competitive one when it is possible, this shouldn’t be down to the customer to chase for.
Caroline Luxmore is chief commercial officer at Ashman Bank
