The move will take the cost of a five-year fixed rate mortgage on 95% of the value of a home to 5.24%
The UK’s largest mutually owned mortgage provider has become the latest lender to charge more for home loans.
Nationwide warned mortgage brokers today that the interest rates on much of its products would increase tomorrow. The move will take the cost of a five-year fixed rate mortgage on 95% of the value of a home to 5.24%. For FTBs also looking to borrow 95% of their home’s value, rates will reach 5.1%.
On average, rates are rising nearly 0.15%. The hikes come even with a cut expected from the BoE on its cost of borrowing later this year and will put pressure on the Chancellor Jeremy Hunt ahead of his Budget next week.
Meanwhile, there are worries in the City the expectations on the pace of Bank of England cuts have become overblown and they have reached the wholesale financial markets, turning the tide in the mortgage market.
The change comes via so-called swap rates, which define the cost of mortgages when passed on to borrowers, have risen amid a feeling that the Bank of England’s pledge to keep its main rate higher for longer will constrain the outlook for action from monetary policymakers.
Justin Moy, MD at EHF Mortgages, said the move this afternoon was “more doom and gloom for borrowers”, but he pointed out that “Nationwide does allow borrowers to reserve rates up to 90 days in advance which is welcomed by all.”
Speaking to the Newspage agency, he added: We now all wait for the budget, and whether this will help rates improve, or we will see the 5%+ deals back on the table and the slowdown of 2023 again.