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Nationwide, Santander and HSBC HIKE mortgage rates despite Bank of England cut – see the full list
Watch our video below for tips on bagging the best deal
MORTGAGE borrowers are being hammered with higher costs as major lenders hike rates and pull top deals despite a recent cut to the Bank of England base rate.
In a blow to buyers, HSBC, Barclays, Santander and Nationwide are among the big lenders that have upped prices this week.
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Over the past month around 200 deals have disappeared from the market, in the biggest month-on-month reduction since July 2023, according to analysis from data site moneyfactscompare.co.uk.
In a blizzard of price increases this week, Nationwide has pushed up rates putting an end to its sub 4% products.
HSBC has now hiked rates twice within as many weeks.
At the same time, Santander has also raised for new and existing customers by up to 0.31%.
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It comes after the Bank of England last week cut the base rate from 5% to 4.75%.
A reduction in central interest rates usually marks a fall in borrowing costs.
Yet, in an unexpected and unwelcome twist, mortgage borrowers are now seeing costs rise.
The average two-year fixed mortgage rate today is 5.44%, pushed up from 5.39% shortly before the Bank of England base rate reduction, according to data from moneyfactscompare.co.uk.
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At the same time, the average five-year fix now sits at 5.17%, up from 5.09%.
Experts said the lenders are pulling back from the market to avoid being overwhelmed by demand in the wake of the cut.
What is the Bank of England base rate and how does it affect me?
Nicholas Mendes, technical director at broker John Charcol, said: "While many lenders have opted to maintain their existing rates to preserve business volumes and service standards, those offering competitive pricing have been forced to adjust likely due to applications levels.
"These influxes often stretch service levels, prompting rapid rate changes to manage demand effectively."
Market rates typically used by lenders to price mortgages have also been increasing.
John Fraser-Tucker, head of mortgages at online broker Mojo Mortgages, said: "While the Bank of England's decision to lower the Bank Rate last week might lead some to expect across-the-board reductions in mortgage rates, it's important to understand that the mortgage market doesn't always move in perfect sync with the Bank of England’s base rate decision.
“Fixed-rate mortgages, in particular, are influenced by a complex array of factors beyond just the Bank Rate. These can include the lender's own funding costs, their view on future economic conditions, competitive positioning in the market, and even their internal goals for new business."
Here is the full list of major lenders that have hiked rates this week...
BARCLAYS
From tomorrow (November 14) Barclays is increasing rates across purchase, remortgage and reward ranges.
Among other increases, the change will see a two-year 5.15% fee-free fix at 90% loan to value, jump to 5.49%
HSBC
In the second increase to rates in two weeks, HSBC has today raised the cost on selected two, three, five and 10-year deals.
The rise hits first-time buyer, home mover and existing customers switching deals.
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The lender is tomorrow (November 14) raising tracker mortgage rates for buy-to-let borrowers, as well as closing applications to new borrowers.
NATIONWIDE
This week's increases from the lender means that most of its sub-4% rates will also go above 4%.
For example, its five-year fixed rate deal with a £999 fee has jumped from 3.94% to 4.14%.
SANTANDER
Santander has upped rates by 0.29% on residential fixed rates for purchase, remortgage, and green products.
The move is u-turn after reducing some rates earlier this month.
TSB
TSB is upping rates up to 0.3% on selected two- and five-year deals. This includes first-time buyer and homemover deals, as well as remortgage products.
Rates now start from 4.32% for new customers.
It comes after the lender also increased selected rates by 0.10% two weeks ago.
VIRGIN MONEY
The lender has raised selected two and five-year rates by up to 0.15% this week.
Products now start from 4.29%.
RATE CUT
One smaller lender that has bucked the trend and reduced rates is MPowered Mortgages.
All of its two and three-year fixed rate mortgages have fallen by as much 0.28% for new purchase and remortgage customers.
For new purchase customers, the lender's two-year fixed rates now start at 4.21% for 60% LTV with a £999 fee and three-year fixed rates start at 4.19% at 60% LTV with a £999 fee.
Should borrowers fix now or wait?
The volatile market could be a worry for anyone looking to move home or fix their mortgage in the coming months.
Most mortgage offers have a shelf life of up to six months, meaning that if you apply for a deal now the lender will honour the rate even if you don't need it until early next year.
This is a good way to lock in rates and avoid added costs if prices keep rising.
If rates happen to fall in the mean time, you can then apply for another deal further down the line.
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Nicholas Mendes said: "For clients nearing the end of their fixed-rate terms, it’s essential not to delay in the hope that rates will revert to levels seen weeks ago.
"Securing a deal now provides certainty in an uncertain market. There is always the option to review and adjust if circumstances change but acting promptly minimises exposure to further rate increases."
How to get the best deal on your mortgage
IF you're looking for a traditional type of mortgage, getting the best rates depends entirely on what's available at any given time.
There are several ways to land the best deal.
Usually the larger the deposit you have the lower the rate you can get.
If you're remortgaging and your loan-to-value ratio (LTV) has changed, you'll get access to better rates than before.
Your LTV will go down if your outstanding mortgage is lower and/or your home's value is higher.
A change to your credit score or a better salary could also help you access better rates.
And if you're nearing the end of a fixed deal soon it's worth looking for new deals now.
You can lock in current deals sometimes up to six months before your current deal ends.
Leaving a fixed deal early will usually come with an early exit fee, so you want to avoid this extra cost.
But depending on the cost and how much you could save by switching versus sticking, it could be worth paying to leave the deal - but compare the costs first.
To find the best deal use a to see what's available.
You can also go to a mortgage broker who can compare a much larger range of deals for you.
Some will charge an extra fee but there are plenty who give advice for free and get paid only on commission from the lender.
You'll also need to factor in fees for the mortgage, though some have no fees at all.
You can add the fee - sometimes more than £1,000 - to the cost of the mortgage, but be aware that means you'll pay interest on it and so will cost more in the long term.
You can use a mortgage calculator to see how much you could borrow.
Remember you'll have to pass the lender's strict eligibility criteria too, which will include affordability checks and looking at your credit file.
You may also need to provide documents such as utility bills, proof of benefits, your last three month's payslips, passports and bank statements.
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