Barclays and NatWest became the latest high street mortgage lenders to announce an upward revision to their fixed mortgage rates today
Major lenders have pulled all of their sub-4% home loans this week, despite a second Bank of England base rate cut.
Barclays and NatWest became the latest high street mortgage lenders to announce an upward revision to their fixed mortgage rates today.
This follows similar hikes this week from Santander, HSBC, Nationwide and TSB among others, as lenders scale back their expectations of the pace of future central bank cuts.
Allied Irish Bank is currently the only lender of scale to offer rates below 4%, according to L&C Mortgages.
This comes despite the BoE cutting the cost of borrowing by 0.25% to 4.75% last week. It was the Bank’s second rate cut following a 0.25% cut in August, which was its first in four years.
However, the Bank’s rate-setting Monetary Policy Committee (MPC) minutes warned that Chancellor Rachel Reeves’ Budget last month, which will spend almost £70 billion over the next five years, will push up inflation next year.
The body estimates quarterly economic growth in a year’s time will be 1.7% as opposed to the 0.9% it was forecasting in August.
But along with this, inflation will be 2.7% rather than 2.2% and it will take a year longer, until early 2027, for the cost of living to return to its 2% target. The cost of borrowing is currently 1.7%.
L&C Mortgages associate director David Hollingworth says: The slew of rate changes in recent weeks has continued to push rates up, reflecting the higher costs for lenders, as the market outlook for rates has edged toward a ‘higher for longer’ expectation.
A number of lenders managed to hold fixed rates below 4%, until now. As sharper rates have fallen away an air of inevitability was building and now all major UK lenders’ fixed rates have once again edged back above 4%, he said.
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