The country’s biggest building society says it will raise rates by up to 0.3 percentage points on selected mortgage products
Nationwide revealed today that it is set to raise its mortgage prices, on the same day the Bank of England (BoE) opted to hold its base rate.
The country’s biggest building society says it will raise rates by up to 0.3 percentage points on selected mortgage products. The higher rates will come into effect tomorrow.
It comes as the BoE seemingly poured cold water on hopes of spring interest rate reductions after holding its base rate at 5.25% today. The Bank’s governor Andrew Bailey noted that, based on amount of the interest rates that had been implied by the market, inflation would likely stay above the Bank’s 2% target all the way until 2027.
Laith Khalaf, head of investment analysis at AJ Bell, noted: Mortgage rates have been declining in recent months, providing some much required relief to beleaguered homeowners. This latest decision from the BoE might firm up mortgage pricing a bit, but it is unlikely to have a huge impact. That does not mean there isn’t still a lot of pain in the post this year for mortgage borrowers, as millions will be stepping back through the looking glass from the heady days of near zero interest rates into a much harsher reality.
Speaking to Newspage, Justin Moy, MD of broker EHF Mortgages, said that the speed of Nationwide’s rise was a sharp contrast to its relative lateness to cut rates this year when hopes of rate cuts were growing.
Given Nationwide was late to the table of rate cuts in January, it is surprising to see them react so quickly in February, but this does show that the cost of funds is increasing and lenders are having to readjust their rates with little notice, he said.
Moy added: Nationwide does allow brokers to reserve deals in advance, which is an important benefit, particularly in a market where rates are rising. No change for current clients looking for a new deal, but those looking to refinance or purchase will be affected.