Rates have wavered recently as views have changed on when the BoE will cut interest rates after UK inflation slowed less than expected in March
Five mortgage lenders have raised rates in the latest blow to homeowners, as expectations of when the Bank of England will lower interest rates are pushed further back.
Barclays, HSBC, NatWest, Accord and Leeds Building Society informed mortgage brokers this week that they were going to be raising rates on some of their mortgage deals.
Rates have wavered recently as views have changed on when the BoE will trim interest rates after UK inflation slowed less than expected in March.
Figures released by the ONS last Wednesday showed that inflation was 3.2% in March, marginally higher than the 3.1% forecasted by economists.
At the beginning of the year money markets forecasted as many as five or six cuts to interest rates, but now are expecting as few as two, with some economists expecting the first cut to take place in June.
Swap rates, which lenders use to price mortgages, are based on what the markets think interest rates will be in the future. The uncertainty over when the Bank of England’s plans to cut the base rate has meant swap rates have increased.
Mortgage brokers said that homeowners are set for a summer of “discontent” and recommend homeowners lock in a deal as quickly as possible.
Elliot Culley, director at Switch Mortgage Finance said: The rate rollercoaster rolls on. Just when the market seems to be picking up some momentum, there is a sharp change of direction. We are now seeing the rise in swap rates last week, filtering through to the public as lenders increase their rates in response.
Ranald Mitchell, director at Charwin Private Clients, said: A summer of mortgage discontent is manifesting as major lenders push rates up further. Home buyers are already frustrated with the market conditions and this will continue to stifle activity. With many unhappy with the costs of mortgages, they will express their displeasure with inaction.