Mortgage Rates on the Rise: What This Means for Homebuyers
Mortgage rates have increased compared to last week, making it even more challenging for prospective homeowners to find a decent price. According to figures from Uswitch, the average rate on a two-year fixed deal now stands at 5.89%, higher than the previous 5.79%. Rates for a five-year deal have also risen, coming in at 5.34%, above last week’s 5.31%.
Anxiety has set in among UK mortgage lenders, with rates being hiked left, right, and centre, amid uncertainty about how the Bank of England’s interest rate path will play out.
With just two Bank of England cuts now expected in 2024, several lenders have recently raised rates, adding to the pressure on homebuyers and those looking to remortgage. About 1.6 million existing borrowers have relatively cheap fixed-rate mortgage deals expiring this year.
HSBC Mortgage Rates
Borrowers have long said goodbye to HSBC’s 3.99% for a five-year deal. The cheapest deal at the lender’s table is now 4.48% for five years. Looking at the two-year options, the lowest rate comes in at 4.83% with a £999 fee. Both cases assume a 60% loan to value (LTV) mortgage, meaning buyers need to have at least 40% for a deposit.
HSBC mortgage rates have increased
NatWest Mortgage Rates
NatWest has lowered some of its mortgage rates, but no offer comes close to its previous 3.94% deal. The best rates prospective borrowers can now get is an online-only deal that offers 4.40% for a five-year deal with a £1,495 fee, assuming a 60% LTV. It offers the same rate for green mortgages – this product is only available for properties with an energy performance certificate (EPC) rating of A or B – but the fee here drops to £995. For a two-year fix, the cheapest a customer can get is 4.77% online, with a product fee of £1,495.
NatWest mortgage rates have changed
Santander Mortgage Rates
Santander has also moved away from its under 4% mortgage with a five-year fix coming in at 4.35%, assuming you have a 40% deposit. Last week this deal was on the table for 4.22%. A 60% LTV two-year fixed rate, with a £999 purchase fee is priced at 4.83%. 75% LTV two-year fixed rate, with a £999 purchase fee is priced at 4.83%.
Santander mortgage rates have increased
Barclays Mortgage Rates
Barclays used to have the cheapest five-year deal for prospective homebuyers with a 40% deposit (60% LTV) that came in at 4.17%, with a £899 fee. No more – the lender has hiked the rate for that deal to the current 4.47%. When it comes to two-year mortgage deals, the lowest you can get is 4.84%, which is higher than last week’s 4.83%.
Barclays mortgage rates have increased
Nationwide Mortgage Rates
At Nationwide, five-year purchase fixed rates will start from 4.59% with a £999 fee for borrowers with at least 40% deposit. Last week this was at 4.34%. Assuming a £300,000 house where you need to borrow £180,000, this would put monthly payments at £1,009.72 per month. Equivalent two-year rates start from 4.84%, higher than last week’s 4.60%.
Nationwide mortgage rates have increased
Halifax Mortgage Rates
Halifax, the UK’s biggest mortgage lender, has lowered some of its deals across a range of mortgages. The lender, owned by Lloyds, offers a two-year fixed rate of 4.80% with a £999 fee for first-time buyers. Higher than last week’s 4.60%. The equivalent five-year rate starts at 4.58% (also 60% LTV), also higher than the previous 4.31%. It also offers a 10-year deal with a mortgage rate of 4.93%.
Halifax mortgage rates have changed
Cheapest Mortgage Deal on the Market
As under 4% mortgage rates are off the market, it makes it harder for prospective homeowners to say they’ve secured a good deal. The 4.35% deal Santander offers appears to be one of the cheapest rates available, but it requires a 40% deposit, so you will need a hefty amount of cash upfront in order to secure the deal. Borrowers would need to spread their home loans over more than 70 years to be able to afford the same mortgages on offer just two years ago, banks have said.
The cheapest mortgage deal on the market
