Brokers say “rate euphoria of 2024 was short-lived”, as Coventry increases rates

Following Santander’s increases yesterday, Coventry has become the latest lender to announce it is increasing mortgage rates.

The society will be increasing all of its fixed residential rates for both new and existing borrowers, as well as introducing fixed rate increases across selected products in its buy-to-let offering.

In light of this, Newspage asked brokers for their thoughts, below.


Katy Eatenton, mortgage and protection specialist at Lifetime Wealth Management:

“The rate euphoria of 2024 was short-lived, with lenders now increasing rates across the board.

“While there is such volatility in the mortgage market, advice is critical.

“Don’t procrastinate if your rate is ending in the next six months.

“Hopefully rates will start coming down again in the second quarter, but it is still advisable to secure the best rates possible today.”

Darryl Dhoffer, adviser at The Mortgage Expert:

“Lenders are now increasing rates quicker than a politician dodging a tough question.

“5-year swap rates are up 0.3% and 2-year swap rates are up 0.42% on this time last year, so lenders are being cautious and having to reprice products.

“As a result, over the past week we have definitely seen a reduction in enquiries compared to the first three weeks in January.

“Uncertainty still remains with borrowers, who are not making quick decisions with sudden movements in interest rates.”

Ben Perks, managing director at Orchard Financial Advisers:

“Coventry follow Santander in the most recent round of rate increases and I’m sure they won’t be the last.

“As swap rates increase further, lenders will have to reprice accordingly. Hopefully this is a blip, and the reductions will come again soon.

“Pressure is surely mounting on the Monetary Policy Committee to reduce the base rate at the next meeting.

“The economy and property market need stimulating and borrowers in particular need a confidence boost.”

Lewis Shaw, owner and mortgage expert at Shaw Financial Services:

“Once again, Coventry Building Society shows us how it’s done by giving 48 hours’ notice of rate increases.

“Whilst it’s not good news to see rates rising for prospective borrowers, this is the shape of things to come for the next couple of weeks.”

Craig Fish, director at Lodestone Mortgages & Protection:

“The rollercoaster ride continues with these latest increases from the Coventry.

“Those needing to arrange a mortgage over the next week or two really need to buckle up and be prepared to move at lightning speed to avoid disappointment and increased cost.”

Imran Hussain, director at Harmony Financial Services:

“Lenders reducing rates at the start of 2024 seems like a distant memory now.

“But you have to give credit to Coventry for giving advisers a 48-hour notice period.

“If you’re in the market for a new mortgage or remortgage right now, my advice is don’t dither but ask your adviser what they need to get the application sorted ASAP.”

Michelle Lawson, director at Lawson Financial:

“This is now becoming the norm again.

“Thankfully Coventry do give a decent 48 hours’ notice, which a lot of lenders could learn from so they do deserve a pat on the back for that.

“So much for a steady and calm start to 2024.”

Rohit Kohli, director at The Mortgage Stop:

“With swap rates increasing steadily over the past few days, it was inevitable that lenders would start to react.

“With Santander already making a move yesterday and other lenders last week, we are likely see more rate hikes as we head towards the next Bank of England rate decision and Spring Budget.

“What’s crucial is how this will affect borrower confidence.

“Though enquiries are still at a high level, we do expect some people to put their plans on hold until they see rates fall again.”

Richard Jennings CeMAP, founder and managing director at Richard Jennings Mortgage Services:

“Another day and another lender announcing rate rises.

“The early optimism for 2024 appears to be dwindling. I anticipate rates will continue to be volatile until at least the next Monetary Policy Committee meeting and the Spring Budget.

“The pressure continues to mount on the Bank of England and Government to curb inflation and ease the pressure on households and businesses alike.”

Simon Bridgland, broker and director at Release Freedom:

“With recent increases in swap markets, it is no surprise that Coventry and other lenders are starting to increase rates, albeit only slightly.

“Give it a while and I think things should start to decrease again. Decreases are never in a straight-line south.

“Even with slight upward clicks on fixed money, it’s still worthwhile for borrowers to get things arranged now.

“First-time buyers in particular find this time unsettling as it’s never known for sure how many bumps are in the road to home ownership and to settling on a deal.

“My advice is to make early arrangements on a mortgage and not to hold out for another drop.

“They wouldn’t want to find themselves in a pinch for time and so it’s best to nab a deal whilst they are still there.”