Nationwide joins the 0.35% rate hike club

Unfortunately more mortgage rate increases due to the threat of inflation brought on by the conflict. With most lenders increasing sharply every few days we hope this is just a short term situation, that will rest once the war is over. In the meantime it may be prudent to take a deal just in case rates go further, you can always change pre-completion.

Lenders have been left second guessing the extent of the volatility in this market with not only regular rate increases, but hefty increases. A jump of 0.35% in rate is by no means insignificant. That being said you would expect with a rate hike of that size, you would hope this would build in some buoyancy within the volatility to slow the down the frequency within which these lenders are changing rates.

What we’ve seen in the last seven to ten days makes the Liz Truss period look like a blip. The speed, scale and frequency of these repricings has been exceptional, and from a broker’s point of view it’s rare to see so many lenders move this quickly and this aggressively in such a short space of time.

For borrowers, affordability is being squeezed in real time. First-time buyers are losing ground almost by the day, and remortgage clients are finding that delays now come with a direct cost. As long as the war keeps driving uncertainty, I expect lenders to stay defensive and rates to keep rising.

This will be the regular flow of traffic for the time being until there is more stability around the world. Unfortunately, aside from getting applications in as soon as possible there is little that can be done for purchasers to secure rates. If borrowers are due to remortgage within the next six months, this needs to be addressed immediately to secure the lowest rates possible

Yet another lender hiking rates, as a broker it is our job to navigate the clients through this turbulent period, swap rates rose sharply last week, and I will be keeping an eye as to see how the market reacts this week to the ongoing conflict in the Middle East, more specialist lenders did pull rates at short notice last week, which no doubt caused disruption with brokers and clients alike.

Keeping potential clients updated is even more important in this period of uncertainty , we can only hope a solution and a way forward is found soon.

Nationwide is another lender continuing to respond to rising wholesale funding costs. Fixed-rate mortgages are typically priced using swap rates, which reflect expectations about future interest rates set by the Bank of England. Over recent weeks, swap rates have risen significantly. As a result, lenders across the market are continuing to reprice products to reflect these changing market conditions while still trying to remain competitive in what remains a busy mortgage market. Repricing also allows lenders to manage business volumes. An increase in rate can help to manage volumes of certain types of mortgage business which can help a lender manage their workflow and risk exposure.