The mutual will be pulling existing rates on Monday 13 March and relaunching the higher priced products on Tuesday.
In a note to brokers, the lender said it was sticking to its commitment of giving brokers 48 hours’ notice before any product changes.
The changes will apply to its owner occupier range and see all two-year tracker, standard two, three and five-year new business rates increase.
Jonathan Stinton, head of intermediary relationships at Coventry Building Society, said: “We’re recalibrating our products in line with market conditions. We’ve given our usual 48 hours’ notice ahead of the changes because we know this is something brokers really appreciate.
“Our service hasn’t been impacted by the popularity of our products, and we will keep monitoring the markets to make sure our rates remain attractive to brokers and their clients.”
Rates on the rise
The rate increases from Coventry Building Society follow the likes of other mainstream lenders that have raised pricing.
This includes Barclays which announced rate rises of up to 0.32 per cent across select purchase and remortgage deals.
Accord Mortgages also put rates up by as much as 0.4 per cent. This applied to select fixed rates up to 95 per cent loan to value (LTV).
Both Accord and Barclays announced the changes on 9 March and brought them in today.
Last week, HSBC and Nationwide also increased their mortgage rates with both citing a rise in funding costs.
An inevitable outcome
Mortgage brokers said it was expected that Coventry Building Society would follow the lead of other lenders and increase its rates to keep up with heightened swap rates.
Amit Patel, adviser at Trinity Finance, said: “It was inevitable that Coventry has increased their rates following the trend of other lenders who increased their rates throughout the week.
“Coventry has always given brokers ample notice when rates are going to increase. They are one of the better lenders in communicating important information to their brokers.”
Anil Mistry, director and mortgage broker at RNR Mortgage Solutions, said it was “not unexpected” that the mutual raised its rates but said it was “admirable” that they had given brokers 48-hour notice.
He added: “This gives brokers ample time to prepare and submit applications, and may serve as a best practice for other lenders to consider adopting.”
Graham Cox, director at Self-employed mortgage broker (SEMH), said: “There’s two factors at play here, I think. The first is that swap rates rose steadily throughout February. The second is mortgage demand was low in January, which meant mainstream lenders were falling over themselves to offer the best deal, and cut rates accordingly.
“Other lenders have increased their rates this week, and Coventry is following suit. If they left their rates where they were, they’d risk being swamped by applications.”
