This comes after several weeks of rising prices and amid expectations that the Bank of England will raise interest rates in the coming months.
Brokers are therefore warning borrowers who are about to remortgage or take out a mortgage to buy a home not to hang around because they cannot guarantee that today’s lowest interest rates will stick around for a long time.
Barclays’ key change, which comes into effect today, is the 4.66% Premier fixed rate for two years with a product fee of £999 – this has now been raised to 4.91%.
The Halifax rate hike, which is also happening as of today, means the lender’s cheapest interest rates will be a 4.90% two-year fixed deal, a 4.93% three-year fixed mortgage and a 4.98% five-year fixed mortgage, according to Aaron Strutt, director of products and communications at Trinity Financial.
HSBC has also just announced that it will raise further interest rates tomorrow (Wednesday 23 September).
According to Sturt, the number of mortgages with interest rates below 5% is rapidly dwindling.
“With more of HSBC’s competitors either offering sub-5% reforms or not offering any sub-5% reforms at all, I expect the bank to follow current market trends,” he said.
“Rates are still more expensive, but the swap rate market seems to have stabilized a little bit because there have been some reductions in mortgage rates.”
Advice for borrowers – What to do if you are remortgaging or buying a home
As lenders launch further rate increases, the average interest rate on a two-year fixed residential mortgage is at its highest levels since April 12, according to Moneyfacts. In the last day alone, it rose from 5.88% to 5.90%. Meanwhile, the five-year average fixed rate reached its highest levels since October 17, 2023 (5.92%), Moneyfacts announced this morning.
“This has become a market where hesitation can cost borrowers real money,” Ranald Mitchell, director of Norwich-based property brokerage Charwin Private Clients, told Newspage.
He added: “Borrowers and brokers have to do their best. The price available this morning could disappear tomorrow, and in a bull market there is a real risk of waiting for something better that never comes.”
“Anyone within six months of their mortgage expiring should review their options now. Secure a deal where appropriate, continue to monitor the market and move again if something better emerges before expiry.
“This is a classic sleep-and-lose market. Interest rates are going in the wrong direction and borrowers who leave the market late risk paying the price.”
