Nationwide adjust rates

The money markets' poor reaction to the mini-Budget has come home to roost for borrowers. What, only last Christmas, was a 5-year fix at 60% loan to value offered at 0.99%, will tomorrow be a product offer of 5.19%. We are seeing seismic changes in the mortgage market this week. This is a strong signal the markets believe an emergency meeting of the Bank of England will happen despite the statement made on Monday. If the Bank of England can hold off until November then these rates will come down, if not, then this is where we now sit for prime clients wanting mortgages. The days of ultra-low mortgages have been relegated to the dustbin of history.

As Brokers we are all aware of the rate rises, recommending a certain deal to a client and if it is not submitted same day chances are that will be gone by the time the client has had time to get their documents together and get the application submitted. However seeing a under 1% deal rise to over 5% in one year is shocking. Over 5% interest rates a year ago was what I would have been recommending to clients with adverse, Inc defaults or missed payments now these are the rates we are looking at for a perfect credit rating and decent deposit size. Nationwide are one of the lenders who have not simply withdrawn from lending meaning that whilst the rates are high, they are providing options for consumers which at the moment is so important. Scary times for our clients and as I have said many times the advice of a good mortgage broker is more Vital than ever.

It's not surprising lenders are ramping up mortgage rates now. UK gilt yields are soaring, as investors dump UK debt and/or speculate on bond prices falling further. All this is feeding into the cost of borrowing and higher mortgage rates. Borrowers are feeling the consequences of markets having concluded was a hare-brained mini-Budget.

Let's be honest, the conservatives as we know them have committed political suicide in the past week. They came up with a plan that all the experts said was insane, which indeed turned out to be insane. It's almost as if experts should be listened to? The sad thing is that, though the Tories will be unelectable for generations, it is going to be at the cost of people's jobs and homes.

This is madness, but a very good sign of the times. Seeing mortgages each day it can be easy to not be shocked by the rates but Nationwide's move was a real eye opener. I was aware rates had sky rocketed but even this shocks me.

For many borrowers, this will be the first notable rate rise they have ever experienced but the increase has come at such speed and scale that it will worry even the most experienced borrowers. For those who face the unfortunate timing of needing to remortgage in the next 6-12 months, it is even worse as their only choices are to sit and wait whilst things get progressively worse or commit to paying an expensive early repayment charge in order to commit to a new rate now. My advice as always is to speak to a fee free broker to assess all options.