According to financial information site Moneyfacts, 17 lenders have increased rates on their fixed rate deals over the last month, including HSBC, Nationwide and TSB. A spokesperson for Moneyfacts pointed out that over the last year borrowers have been treated to some of the lowest mortgage rates on record.
She added: “However this is about to change with HSBC pulling the lowest deal that Moneyfacts records and whilst competition in the market remains high, time is perhaps up on the lowest deals in the market.
“The average two-year fixed rate mortgage has fallen every month since March this year, making this month’s static average rate highly significant as this may represent a turning point in the low rate mortgage trend.”
Adrian Anderson, director of Anderson Harris, said that now was the time for some borrowers to rethink their strategy.
He said: “The odd lender here and there may come out with a lower rate but it looks for now as though we have seen the back of the very cheapest rates.”
Mark Harris, chief executive of SPF Private Clients, said it had only been a matter of time before the cheapest rate was pulled as Swap rates have been increasing. He added: “HSBC has been the most aggressive lender in terms of pricing so the fact it is now moving rates the other way could well signal a seismic shift in pricing.”
However, he warned that there was no need for brokers or their clients to panic just yet.
“While a few lenders have raised fixes in the past couple of weeks, at the same time some lenders such as Virgin Money, Santander and Barclays have been reducing their five-year fixed rates. Some lenders may have hedged funds against Swap rate rises or still want to attract business so are prepared to reduce their margins and take less profit, so don’t rule out some competitive deals,” he continued.
James Mole, head of mortgages and finance at Nova Financial, said that the latest moves made long-term fixed deals look even more attractive.
He explained: “It’s very hard to predict where the market will be after the two-year mark so I think fixed rates make great sense if you are talking about a five-year time frame.”
