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Nationwide increasing rates from Friday 26 May

ended 25. May 2023

A Newspage broker has just alerted us to the fact that Nationwide have announced they will be increasing selected fixed and tracker rates by up to 0.45% from tomorrow, Fri 26 May. Any thoughts, send them across ASAP. Few Qs:

  • Is it acceptable when lenders announce rate changes at such short notice (OK, not as bad as some but today is nearly over after all)?
  • What the hell is going on in the mortgage market? Are lenders now pricing in a much higher base rate peak? It feels like Mini-Budget Part Deux.
  • What's happening to swap rates?

Any other thoughts, send them across ASAP as this story is breaking.

10 responses from the Newspage community

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Justin Moy
Managing Director at EHF Mortgages
Same-day product withdrawals just cause potential panic and significant stress for both clients and brokers. Unfortunately, it is symptomatic of the current market. At least Nationwide allows us to reserve rates in advance, so we don't have to complete the whole process to secure a current deal. Market commentators and agencies have suggested that the base rate may rise as high as 5.5%, so Sonia rates have reacted to this news, and that has just worried lenders enough to pass on those increases. Underlying food inflation is much higher than expected, and this has caused those ripples of nervousness within financial markets. What we potentially gain from reducing energy costs will go straight back out on mortgage payments. It feels like some you win, but more you lose.
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Craig Fish
Director at Lodestone Mortgages
There is a feeling of deja-vu, in the air it has to be said. To be honest I think some lenders have seen this coming. Every day this week we have received numerous emails from lenders announcing product withdrawals, rate increases, etc, and many at the last minute, which is just not acceptable. It creates chaos in the handling of clients' applications. Following the latest inflation data, this is not, however, unexpected. SWAP rates have been steadily increasing over the past couple of weeks and then they jumped at the inflation data announcement. It certainly seems that the markets are pricing in a higher-than-expected base rate and this is impacting lenders' rates. Advice to clients looking for mortgage options is do not delay, but secure your rate today.
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Imran Hussain
Director at Harmony Financial Services
Lenders are nervous and are pricing accordingly. Short notice periods and products being pulled with hardly any notice at all is resulting in a very stressful time for advisers and borrowers alike. It's not quite the mini-Budget but there's certainly some nerves out there at the moment.
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Rohit Kohli
Director at The Mortgage Stop
With another lender announcing rate increases, the markets seem to be pricing in a 5.5% base rate in the near future. Lenders, such as Nationwide, are reacting to this speculation by adjusting their rates ahead of time, and at least providing us with a reasonable amount of time to manage clients' expectations. The rapid changes in rates are likely to unsettle the housing market and potentially impact consumer confidence negatively. Despite some positive news this week, core inflation remains stubbornly high, which is causing worry among market participants. The current situation is fostering a sense of uncertainty that markets typically react negatively to. It feels like everyone needs to take a metaphorical big gulp of something strong and brace themselves for potential turbulence.
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Riz Malik
Independent Financial Adviser at R3 Wealth
Clinging to a mantra of 'when in doubt, reprice quickly,' lenders are reacting to the erratic financial markets that are not impressed with the rate of falling inflation. Currently, the pace of change in the mortgage market makes each day feel like a month, with the prospect of stability seemingly drifting further away. I'm asking Santa for a stamp duty holiday.
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Jamie Lennox
Director at Dimora Mortgages
Following the inflation announcement on Wednesday, the immediate reaction that followed with swap rates and the response from lenders is certainly making it feel like the post-mini-Budget period last year. With the markets now predicting a higher base rate than originally forecast, this has created a ripple effect that has pushed swap rates dramatically upwards, which in turn has caused lenders to revisit their current pricing. Although short notice, Nationwide are one of the few lenders that will allow us to reserve a product for 30 days, even if the full application hasn't been submitted, which buys brokers extra time.
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Adam Smith
Founder at Alfa Mortgages
Today has been an incredibly eventful day, filled with a flurry of emails from lenders announcing intriguing rate changes and product pulls. There seems to be an air of heightened anticipation and excitement across the industry, creating a captivating atmosphere of rapid movement and dynamic shifts.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
I think there does seem to be a trend of lenders repricing upwards at the moment. With inflation not coming down as fast as was hoped and the economy showing that it can probably bear higher interest rates still, lenders seem to feel rates will stay a bit higher for longer and are just pricing appropriately.
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Amit Patel
Adviser at Trinity Finance
Crash, Bang, Wallop. The mortgage market has imploded yet again. Germany entering a recession and nervousness around the US debt ceiling has sent shockwaves through the financial markets. If Congress decides not to increase the debt ceiling by the 1st of June, the US will run out of money to service its debt and this will have huge ramifications for the global economy. Add on top of this the spiralling rate of inflation and I fear the Bank of England will be more aggressive with their next base rate announcement.
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Hannah Bashford
Director at Model Financial Solutions
This is reminiscent of October 2022 and it wasn’t a good time then and isn’t a good time now. This short notice does not treat customers fairly although, with Nationwide, at least you can book the rate and then revisit the application at a later date so you could get a few clients the rate they want without being chained to your desk or dropping everything else in your life to get the clients the best rate. So much for consumer duty, what do these lenders have to say about this practice in relation to that?