Nationwide raises mortgage prices today as interest rates put on hold (Image: Getty)
Nationwide has hiked selected mortgage interest rates by up to 0.3 percent hike across its fixed range, taking effect today.
The announcement comes after the Bank of England decided to hold the Base Rate at a historic 16-year high of 5.25 percent this month, despite pleas to lower it.
Nationwide’s two and five year fixed deals are affected for purchases and some remortgage options, while product transfer deals remain unaffected this time.
A Nationwide spokesperson said: “We continually review our mortgage rates and have made a number of cuts in recent months.
“However, we’re making some increases on selected products today to ensure that our new business mortgage rates remain sustainable and that we can continue to offer the best possible service to brokers and borrowers alike.”
Two and five-year fixed mortgage deals are some of the rates affected by today’s change. (Image: Getty)
They added: “Even with these changes, Nationwide remains well-positioned in the market to support borrowers of all types and our rates for existing members switching remain unchanged.”
Speaking to the Newspage news agency, Justin Moy, managing director at EHF Mortgages said: “Given Nationwide was late to the table of rate cuts in January, it’s 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.
“Nationwide does allow brokers to reserve deals in advance, which is an important benefit, especially in a market where rates are increasing. No change for existing clients looking for a new deal, but those looking to refinance or purchase will be affected.
Elliott Culley, director at Switch Mortgage Finance said: “With lender margins so tight right now, it’s not surprising to see some lenders dip in and out of being the most competitive.
“Whereas some lenders have changed rates on either purchase or remortgages, Nationwide have increased across the board, which implies they got extremely busy very quickly.”
Gary Bush, financial adviser at MortgageShop.com added: “Sadly, Nationwide appears to have been hit with a deluge of new applications that has forced them to increase their fixed rates again.
“With the Bank of England holding the base rate, this mortgage rate price war is far from over and we expect more lender rate decreases shortly.”
Early January saw a spate of lenders launching new deals at sub-four percent, but new deals of these kinds have reduced over the past week.
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Katy Eatenton, mortgage and protection specialist at Lifetime Wealth Management said: “There’s definitely been a drop in confidence over the last week, with withdrawals and increases from four of the big six. It will concern borrowers that are due to remortgage over the coming months if they haven’t secured a rate already.”
Meanwhile, Rightmove’s mortgage expert Matt Smith pointed out that mortgage rates are currently “settling” from the “significant drops” seen at the start of January.
According to data from Moneyfactscompare, average mortgage rates across two and five yeat fixed ranges have increased overnight.
Today, the average two-year fixed residential mortgage rate is 5.59 percent, up from an average rate of 5.56 percent on the previous working day.
A slightly more sizeable rise can be seen in the five-year fix market, with average rates increasing from 5.18 percent to 5.23 percent overnight.
Jonathan Samuels, CEO of specialist property lending experts Octane Capital, said: “The initial expectation from the market was that interest rates would fall in January, but despite this expectation, our latest analysis shows that five-year swap rates have increased by a daily average of 0.27 percent so far this year.
“Over the same time period prior to the start of 2024, our analysis shows that they had been declining at a daily rate of -0.77 percent.
“Now that the market’s expectation has changed with rates being held for a fourth consecutive time, the recent increase in swap rates is only likely to continue. As the lead market indicator of mortgage rate movement, we can only anticipate that mortgage rates will start to follow suit in February.”
Mr Samuels added: “While the outlook may be a more positive one for the year ahead, there’s certainly no guarantee that mortgage rates will come down any further, or even remain at their current levels. For buyers, this means acting with urgency now if they do wish to secure the rates currently on offer.”
