The rate changes will impact all residential fixed new business rates, including offset, interest-only, and offset interest-only, which will all be raised
Coventry Building Society has announced that it is raising the rates of selected residential and buy-to-let (BTL) products.
According to its commitment to give intermediary partners two days’ notice of product closures, the lender informed brokers that it will be closing specific products at 8 pm tomorrow, July 18.
The building society said it would be introducing new products at 8 am on Wednesday, July 19.
The rate changes will impact all residential fixed new business rates, including offset, interest-only, and offset interest-only, which will all be raised.
The building society is pulling out all fixed new business rates at 80 per cent loan-to-value (LTV), and is withdrawing the remortgage cashback option on offset, interest-only, and offset interest-only for now.
In the meantime, all fixed buy-to-let and portfolio BTL new business rates at 65 per cent loan-to-value will be raised. It will withdraw all fixed BTL and portfolio BTL new business rates at 75 per cent loan-to-value.
There will be no changes on the lender’s current customer only (product transfer and further advance) rates in residential as well as BTL ranges.
A worrying indication of what is to come is the notice of product withdrawals from some lenders, suggesting that they are preparing for impact on Wednesday when inflation figure is announced, said Paul Welch, founder and chief executive at Large Mortgage Loans. If core inflation figures continue to rise, money markets will react, increasing swap rates.
He said: What does this mean for homeowners? Another jump in fixed-rate mortgages, possibly rising into the 7.5 per cent level. Money markets view the UK economy as volatile, and until we control inflation, mortgage borrowers will continue to bear the burden of this financial storm.