Moneyfacts Report: Rate Hikes Outpace Cuts Among Lenders

Lenders are increasingly raising rates, with some reducing them and others withdrawing products. New and attractive mortgage deals are also entering the market.

This week, the number of lenders raising rates on selected fixed mortgages significantly outpaced those making cuts. Additionally, a handful of lenders withdrew their offerings. Consequently, the average rates for both two- and five-year fixed mortgages increased by 0.03% week-on-week.

Moneyfacts spokesperson Caitlyn Eastell highlighted that among the most notable lenders raising rates were TSB and Lloyds Bank, both increasing by 0.20%. Virgin Money raised its rates by 0.10% and launched a new five-year fixed ‘intermediary exclusive.’ HSBC also raised its rates, with increases of up to 0.26%.

Building societies implemented various changes across their products this week. Monmouthshire Building Society and Leeds Building Society both increased their fixed rates by 0.10%, Skipton Building Society by up to 0.13%, Leek Building Society by 0.05%, and Principality Building Society by up to 0.27%.

Conversely, Skipton Building Society reduced its rates by 0.10%, while Principality Building Society decreased by 0.07%. Melton Building Society and Buckinghamshire Building Society also made several rate reductions to their  range.

Notably, several providers withdrew their fixed-rate products. These include West Brom Building Society, Scottish Building Society, Saffron Building Society, Leeds Building Society, Vernon Building Society, Cambridge Building Society, Melton Building Society, Virgin Money, Foundation Home Loans, and Kensington.

Eastell highlighted some attractive deals that entered the market this week. Notably, Leeds Building Society introduced a two-year fixed-rate deal at 5.15%, available at 75% loan-to-value for all borrowers. This offer does not include any product fees and provides a free valuation fee for everyone, along with assistance with costs for customers remortgaging. Overall, this deal may appeal to those looking to save on upfront mortgage costs.

“It may be discouraging to see many providers increasing their rates, but this could be expected due to swap rates and the recent General Election announcement potentially impacting interest rates. Despite this, some lenders are still reducing rates and offering attractive new deals.”