Accord Mortgages will lift home loan rates for new customers by up to 40 basis points in a move that will see the old prices withdrawn at 8pm today (9 March) and replaced at 8am tomorrow (10 March).
The broker-only arm of Yorkshire Building Society says the changes cover:
The move comes after rises in international swap rates over the last month, while earlier this week US Federal Reserve chairman Jerome Powell told lawmakers that due to the slowing decline of inflation “the ultimate level of interest rates is likely to be higher than previously anticipated”.
The Bank of England’s Monetary Policy Committee will make its next decision on UK interest rates on 23 March.
Verve Financial director Gary Boakes says: “With swap rates increasing and the likelihood of another base rate rise this month, this is going to be a common trend with lenders in the coming weeks.
“Accord following closely on the heels of HSBC and Platform raising their rates. Lenders are still being very competitive, though, and with lenders still offering sub-4% rates at certain LTVs it is not all doom and gloom even with talk of rate rises.”
Riverside Mortgages owner Lewis Shaw points out: “We’ve been warning about the possibility of further rate rises for the past six weeks. Accord is one of several lenders that have started the slow, inexorable march upwards again.
“This is predicated on rising gilt yields, which feed into SONIA [Sterling Overnight Index Average] swaps and then show up in higher fixed-rate mortgage pricing.
“Sadly, due to the inflationary pressures in the US economy and the Fed poised to hike rates higher and keep them there for longer, markets are already pricing in the impact of a stronger dollar.
“The Bank of England will follow suit due to the risk of worsening our own inflationary problems, especially when the minimum wage is rising by over 9% in April and energy bills are set to increase once more.”
Dimora Mortgages director Jamie Lennox adds: “With swap rates all being up circa 5bps compared to a month ago, it has come as no surprise some lenders are having to reprice their mortgages accordingly as the cost to them to get fixed rate money in has increased and they will still need to maintain a profit margin.
“Whether this is a future trend of increases to come or a correction from lenders being over-optimistic, I’m not quite sure yet. A lot is going to hinge on the next base rate meeting and the commentary that accompanies it in the minutes.”
