The latest adjustments affect fixed and tracker mortgage products, with Nationwide increasing some rates by up to 0.21% and Virgin Money raising selected fixed rates by as much as 0.20%. The lenders’ moves have been linked by mortgage specialists to changes in swap rates and funding costs.
Nationwide and Virgin Money Follow Wider Lender Repricing
The rate increases from Nationwide and Virgin Money follow Barclays’ decision earlier in the week to increase its mortgage pricing. According to the report from the Mirror, Barclays raised its two-year fixed mortgage from 4.75% to 5.05%, while its five-year fixed mortgage moved from 4.93% to 5.03%.
Mortgage brokers said the latest changes reflect wider market conditions. Justin Moy, managing director of EHF Mortgages, said Nationwide and Virgin Money were adjusting rates as swap rates and the economic environment showed no improvement in the short or long term.
According to Moy, there are now few fixed mortgage deals below 5% available, which affects both people looking to buy homes and those preparing to remortgage. He said government schemes aimed at helping buyers with smaller deposits would have limited impact if mortgage rates remained high.
James Blackler, managing director of Oakstead Finance, said the pricing of mortgages is influenced by swap rates. He explained that borrowers who prepare early for remortgaging can avoid being affected by sudden changes close to the end of an existing fixed deal.
Brokers Warn Borrowers Should Monitor Changing Mortgage Costs
Other mortgage advisers said borrowers should continue to review their options as rates remain changeable. Tracey Dixon, a buy-to-let mortgage specialist and owner of Pure Mortgage and Protection, said lenders were adjusting prices as their funding costs increased. According to Dixon, borrowers approaching the end of a fixed mortgage deal should look at available options early rather than waiting for certainty, as rates can move in either direction.
Elliott Benson, owner of Sett Mortgages, said mortgage rates have been changing quickly, with several lenders increasing prices over the previous week. He added that market conditions could change rapidly, as seen previously when rates moved lower after periods of increases.
David Stirling, an independent financial adviser at Mint Wealth, described the current situation as a “rollercoaster” for borrowers. He said Nationwide and Virgin Money’s rate increases would be disappointing for people hoping for more stability in mortgage costs.
Michelle Lawson, director of Lawson Financial, also commented on the pressure facing borrowers following the latest increases. She said household budgets were being stretched as mortgage costs changed.
The latest moves from Nationwide and Virgin Money underline the continuing adjustments taking place across the mortgage market. Borrowers and advisers are watching lender pricing closely as changes in funding costs and swap rates continue to influence available deals.
