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Virgin Money follows HSBC in hiking rates "in another blow to borrowers"

ended 12. November 2024

Following HSBC this morning, Virgin Money is the latest lender to announce it is increasing fixed rates today across its Purchase, Remortgage, Buy-to-Let and Product Transfer range. The increases, of up to 0.25%, will come into effect from 8pm tonight. Newspage asked brokers for their thoughts on what's happening to mortgage pricing at the moment and where they think rates are headed next. Their views are below.

9 responses from the Newspage community

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Jack TuttonVerified
Director at SJ Mortgages
Yet more misery for mortgage holders as a result of the autumn Budget. The cost of borrowing for mortgage lenders has increased significantly following the Budget. This is due to the fear that inflation will start climbing again after the chancellor's new policies. As a result, it is unsurprising that HSBC, Virgin and now Nationwide are increasing their rates after a number of other lenders made the same decision last week.
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Iain SwattonVerified
Director at Exemplar Financial Services
Virgin Money’s decision to increase mortgage rates following HSBC’s hike earlier today comes at a confusing time for borrowers, especially after last week’s 0.25% base rate cut from the Bank of England. Borrowers might wonder why the recent reduction isn’t trickling down into their mortgage rates, making it harder to feel encouraged as we head into the holiday season. This trend is likely to lead some to adopt a ‘wait-and-see’ approach, potentially holding off until the new year. With economists predicting rates could settle around 4% by late 2025, many borrowers may be left weighing their options carefully over the coming months.
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Michelle LawsonVerified
Director at Lawson Financial
In another blow to borrowers, Virgin Money are the latest lender to join the rate increase party. Borrowers really need to think about acting to secure a rate as the markets are highly volatile at the moment and conditions are changing rapidly.
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Stephen PerkinsVerified
Managing Director at Yellow Brick Mortgages
As the reality bites that this month's base rate reduction will be the last of the year and maybe for a few months beyond that, lender projections have been revised and consequently rates are now increasing. Borrowers will be left confused as to how a base rate reduction is met with lender increases but the medium-term outlook has taken a hit.
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Emma JonesVerified
Managing Director at Whenthebanksaysno.co.uk
A lot of borrowers will be puzzled by the fact that rates are rising when the base rate has only just been cut. What we're seeing is the fallout from the Budget feeding through into mortgage pricing. Rates are now expected to come down more slowly and the increases we're now seeing are the result of that.
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Tony CastleVerified
Managing Director at PFG Mortgages
A bitter pill to swallow for borrowers. Just off of the back of the Bank of England decreasing the base rate last week, many of borrowers would have being expecting rates to be on the decrease rather than lenders increasing. It’s seems the volatility in rates will continue.
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Katy EatentonVerified
Mortgage & Protection Specialist at Eatenton Finance
After a painful two years for borrowers, 2024 looked to be the change we had been waiting for, with regular rate reductions and changing criteria. However, the recent budget has put the final nail in the coffin and the fall out is resulting in lenders increasng rates weekly. Leaving borrowers confused as the Bank of England have recently reduced their base rate, but the general market hasn't benefitted from this at all as SWAP rates govern the fixed rates rather than the BOE base rate
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Elliott CulleyVerified
Director at Switch Mortgage Finance
Even though the base rate came down last week, the prognosis was there will not be another rate drop this year. Couple this with the OBR's report on the Budget suggesting inflation was to become more ingrained in the UK and, as a result, that the base rate will reduce more slowly, and you have all the reasons why rates have increased over the past two weeks. SWAP rates react to the economic climate and when predictions about the future become more cautious lenders will have no choice but to react in the way we are seeing.
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Hannah BashfordVerified
Director at Model Financial Solutions
Borrowers will be baffled as to why lenders are increasing rates when the base rate was cut less than a week ago. Since the Budget, the clear message from the markets is that rates look set to remain higher for longer and therefore this adjustment comes as lenders will have underpriced their products before the Budget and are now having to reconsider their position. Borrowers need to lock in rates when they can and keep them under review. It’s the only way to play the game at the moment.