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TSB and Leeds hikes rates: "The direction of travel is definitely upwards for mortgage rates"

ended 16. January 2025

Both TSB and Leeds Building Society have today announced rate changes with the former hiking residential rates by up to 0.15%. Newspage asked brokers if this is set to be the direction of travel given ongoing market volatility — and for their advice to borrowers.

 

7 responses from the Newspage community

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Iain SwattonVerified
Director at Exemplar Financial Services
With both TSB and Leeds raising rates, it’s clear the market remains volatile. The recent surprise fall in inflation has sparked speculation about a potential base rate cut from the Bank of England, but for now, uncertainty reigns. For anyone looking for a mortgage, the advice is simple: don’t play the waiting game. A good broker doesn’t just find you a deal—they keep reviewing your options to ensure you stay on track, whatever the market throws your way.
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Ken JamesVerified
Director at Contractor Mortgage Services
The direction of travel is definitely upwards for mortgage rates. Faced with a growing storm of bad economic news and extreme market volatility, lenders are beginning to batten down the hatches and barricade themselves in. We had hoped for a promising start to 2025 but it simply hasn't materialised.
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Justin MoyVerified
Managing Director at EHF Mortgages
More and more lenders will have little option but to increase rates as the Swap market deteriorates. Lenders like TSB are also taking the opportunity to introduce additional niche products where the rate is less important but having good quality products and criteria are more essential. We will see more lenders increase over the coming days as no bank will want to be top of the tables at the moment.
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Dariusz KarpowiczVerified
Director at Albion Financial Advice
The latest rate increases from TSB and Leeds Building Society paint a sobering picture of our current mortgage landscape. With hikes of up to 0.15%, it's clear that lenders are responding to the persistent market volatility. Looking at the broader economic indicators, particularly rising swap rates, there's little room for optimism in the immediate future. What the market desperately needs is decisive action to reverse this upward trend, as borrowers continue to face mounting pressure on their finances. Until then, we're likely to see more lenders following this path of rate increases.
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Emma JonesVerified
Managing Director at Whenthebanksaysno.co.uk
For now, rates are headed in one direction only and that, sadly, is up. It has been a tumultuous start to the year in the markets and their uncertainty around the UK economy and the impact of the Budget is translating into higher rates for borrowers. Households need to have the pressure on them reduced and for now that's simply not happening.
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Darryl DhofferVerified
Founder at The Mortgage Geezer
The decision by TSB and Leeds Building Society to increase interest rates despite recent declines in SONIA swaps is a baffling move that will undoubtedly leave borrowers scratching their heads. While these lenders may cite various internal factors, it's difficult to justify these rate hikes when the underlying market conditions suggest a potential for lower borrowing costs. This perplexing decision raises serious questions about these lenders' commitment to providing competitive and fair rates for their customers.
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Elliott CulleyVerified
Director at Switch Mortgage Finance
Swap rates have risen over the past few weeks and this has led to lenders having to increase rates as a result. The unexpected fall in inflation has slowed the increases, but is not enough on its own to change the tide of where rates are currently going. If further positive data comes out in the coming weeks, this could lead to rates reducing, however until then expect lenders to increase rates as their margins are being squeezed.