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Nationwide hikes selected fixed rates by up to 0.15% after "hoovering up a lot of the mortgage market in recent weeks"

ended 28. October 2024

Just when borrowers thought it was safe to come out as Barclays went sub-4% on a 2-year fixed rate, another major high street lender has just increased its rates. Nationwide has announced that, from tomorrow, Tuesday 29 October, it is increasing selected fixed rates by up to 0.15%. Experts, on the whole, were not worried, with Darryl Dhoffer of The Mortgage Geezer saying that these rate changes are more about the lender maintaining service levels after “hoovering up a lot of the mortgage market in recent weeks”. Meanwhile, Kelsey Phillips of Arose Finance said that it's no surprise rates are being changed on an almost daily basis given the sheer gravitas of the fortnight ahead: “Within the next two weeks, we have the UK autumn Budget delivered by the first Labour government since 2010, a geopolitically pivotal US election and the penultimate Bank of England monetary policy decision for 2024.”

8 responses from the Newspage community

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Darryl DhofferVerified
Founder at The Mortgage Geezer
In all fairness to Nationwide, they have been hoovering up a lot of the mortgage market in recent weeks. They've been so competitive that they are likely now increasing rates slightly to manage current work transactions more than anything. All eyes, at least for those who dare look, are now on the Budget. The increasingly sombre signals emerging from the Government suggest it could be a fiscal event to forget.
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Kelsey PhillipsVerified
Head of Specialist Lending at Arose Finance
Recently, secured lending rates have walked a particularly tight rope between macroeconomic data, escalating global geopolitical tensions, consequent inflation expectations and UK regulatory risk. Consequently, mortgage rates are being adjusted by high-street lenders on an almost daily basis. Within the next two weeks, we have the UK autumn Budget delivered by the first Labour government since 2010, a geopolitically pivotal US election and the penultimate Bank of England monetary policy decision for 2024. Lender appetite to warehouse respective risks has evolved dynamically over the year and has, at times, deviated causing a dislocation between lender rate direction of travel. To understand why some secured lenders are hiking interest rates whilst others cut, it's important to remember the construction of various bank loan-books will differ. The method by which banks raise funding will inform their lending appetite, rate exposure and capacity to warehouse the aforementioned risks.
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Dariusz KarpowiczVerified
Director at Albion Financial Advice
Nationwide's decision to increase selected fixed rates by up to 0.15% comes as a surprise, especially following Barclays' recent rate reductions. After nearly a month of stable pricing, this adjustment appears to be a minor correction rather than an indication of a broader trend in the mortgage market. This change may reflect the upward pressure on gilt yields as market participants prepare for the upcoming Budget announcement. While this adjustment raises questions about the direction of mortgage rates, it’s important to view it in context. Let’s hope that the forthcoming Budget doesn’t introduce further volatility into the market, allowing for a more stable environment for borrowers.
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Rohit KohliVerified
Director at The Mortgage Stop
The mortgage market is truly topsy turvy today, with major lenders making markedly mixed moves. With fears of a Truss-style reaction haunting Wednesday's Halloween Budget, not even the big lenders can agree on the direction ahead. Rumours of potential tax hikes only heighten the uncertainty. These rate changes reflect the tug of war between recent positive inflation data and upward pressure on gilt yields, as bond markets brace for possible shocks from the Budget's outcome.
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Justin MoyVerified
Managing Director at EHF Mortgages
Nationwide had held their rates since the 24th September, so it was inevitable a small increase was on the cards at some point, but full marks to them for keeping their nerve over the past few weeks while others reacted with perhaps too much haste. The almost unique opportunity to reserve a mortgage deal for up to three months will make this more of a soft landing when compared to others who gave brokers just a few hours to react.
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Daniel HobbsVerified
Managing Director at New Leaf Distribution
There is a huge amount of uncertainty ahead of the Budget and the fact that two major lenders are heading in different directions on the same day highlights that. It may be that Nationwide want to maintain their service levels or it may be that they are anxious about fiscal fallout and how the bond markets might react.
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Elliott BensonVerified
Owner at Sett Mortgages
Nationwide have been leading the lower rate charge for a long time, and sometimes a lender has to increase slightly to maintain service levels. I don't think this is anything more than that, especially given that Barclays has also been very competitive laying a smackdown today with a sub-4% two-year fix.
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Iain SwattonVerified
Director at Exemplar Financial Services
Nationwide hiking rates not long after Barclays lowered theirs shows the radical uncertainty being generated by the Budget, with the market changing by the hour. This may be Nationwide responding to shifting demand, but it certainly creates a sense of instability and nervousness. With the Budget just around the corner, consumers are left in a whirlwind of decisions: act now or wait? You can’t help but feel for buyers and homeowners who are stuck in this guessing game. Here’s hoping Wednesday’s Budget brings some clarity—and maybe a hint of stability—to help everyone make confident choices moving forward.