As of 5 July, its two-year fixed mortgage rates for residential borrowers who are purchasing or remortgaging have been increased by as much as 0.4 per cent. This applies to products up to 90 per cent loan to value (LTV).
Rates now start from 6.14 per cent for a two-year fix at 60 per cent LTV.
The rates on its two and five-year fixes for buy-to-let borrowers who are purchasing or remortgaging have risen by 0.35 per cent.
Across its product transfer deals, rates on two and five-year fixes for buy-to-let borrowers have gone up by as much as 0.6 per cent, while two-year fixed residential options up to 90 per cent LTV have been increased by 0.4 per cent.
TSB has also increased the rates on its additional borrowing products, with two and five-year fixed buy-to-let deals rising by up to 0.6 per cent and two-year fixed residential deals are increasing by 0.4 per cent.
Halifax ups remortgage rates
Halifax has increased its remortgage rates for the second time in a week.
The lender announced rate rises last week and has made changes again, with pricing on its fee-free two-year fix at 60 per cent LTV now at 6.52 per cent. This rate applies up to 85 per cent LTV, while its 90 per cent LTV option is priced at 6.6 per cent.
A flat rate of 5.96 per cent applies to the five-year fixed remortgages up to 90 per cent LTV, while the 10-year fixed option at both 60 and 75 per cent LTV has a rate of 5.5 per cent.
Across the options with a £999 fee, two-year fixes between 60 and 85 per cent LTV have a rate of 6.21 per cent, while the five-year fixes have a flat rate of 5.83 per cent.
The corresponding 10-year fixed deals have rates of 5.43 per cent.
For borrowers requiring large loans, the two-year fixes between 60 and 85 per cent LTV have rates of 6.46 per cent and the five-year fixed alternatives are priced at 6.08 per cent.
Priced out of the market
Brokers reacted to Halifax’s latest move, suggesting that the lender was using pricing to control its business volumes.
Amit Patel, adviser at Trinity Finance, said: “Halifax has decided to perhaps effectively price itself out of the market to protect its loan book and current obligations to its existing savers and borrowers. This is the new normal, with no apparent end in sight, unless the Bank of England starts lowering the base rate, which looks unlikely.”
Samuel Mather-Holgate, independent financial adviser at Mather and Murray Financial, added: “Setting rates at this level shows the sheer uncertainty in the market. Halifax clearly don’t want a lot of new business, and who could blame them in the current environment?
“They are clearly unsure about the direction of rates and the economy, which could damage their loan book. When rates turn and start heading south I would expect to see a Halifax product back at the top of the best buy tables.”
Others predicted that more lenders would make similar decisions.
Paul Welch, founder and CEO at Large Mortgage Loans, said: “I’m afraid to say that we are at the beginning of a domino effect. Now that Halifax has announced these sky-high rates, it’s only a matter of time before other mainstream lenders follow suit. I’m now thinking that rates of seven per cent, before the summer is out, was a conservative estimate.
“I would urge borrowers to consider specialist lenders. They are often more flexible in their lending criteria and look at the bigger picture. Explore all lending avenues and a professional, independent mortgage adviser will help you to do this. Only yesterday, I was able to find a two-year fixed rate at 5.28 per cent, up to 75 per cent LTV, on loans up to £1m.”
