From 3 February, its two-year fixed rate for new homemovers at 60% loan to value (LTV) will rise from 3.5% to 3.69% with a £1,499 fee, while the deal with a £999 fee will rise from 3.55% to 3.74%. The fee-free product will be increased from 3.74% to 3.89%.
Across its three-year options at the same tier, the mortgage with a £999 fee will rise from 3.92% to 3.77% and the fee-free product will go up from 3.79% to 3.94%.
As for the five-year fixes, the deal with a £1,499 fee will increase from 3.7% to 3.85% and the product with a £999 fee will go up from 3.75% to 3.9%. The fee-free mortgage will be increased from 3.89% to 4.04%.
Rate increases will also be made to high-LTV options, such as the two-, three- and five-year fixes at 95% LTV, which will rise by 0.15%.
Nationwide will also increase all first-time buyer and new business shared equity rates, as well as selected remortgage pricing, excluding 10-year fixed and tracker deals.
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For existing borrowers, all homemover and shared equity rates, excluding 10-year fixed and tracker deals, along with selected additional borrowing and some switcher rates.
Virgin Money introduces higher mortgage rates
Virgin Money has announced some product withdrawals and rate increases, effective from 3 February.
The lender will pull two- and five-year fixed exclusive purchase products at 75% and 80% LTV with an £895 fee and no fee, while fee-free two- and five-year fixes at 90% LTV will be pulled.
Virgin Money will introduce a two-year fixed rate purchase deal with a £999 fee and rate of 3.87%, a fee-saver option priced at 4.06%, along with corresponding five-year fixed rates at 4.14% and 4.22%, respectively.
Rate increases will be made to two-year fixed purchases with a £999 fee, with increases of up to 0.1% starting from 3.85%, while fee-saver rates will rise by up to 0.08% and start at 4.04%. Its five-year fixes, both with a £999 fee and no fee, will go up by as much as 0.15%, starting from 3.96% and 4.07%.
Shared ownership rates will rise by as much as 0.15% and start at 3.85%.
Selected remortgage rates will be increased by as much as 0.14%, while increases of 0.05% will be made to selected two- and five-year fixed product transfers with a £1,999 or £999 fee.
Principality BS raises product transfer rates
Principality Building Society has increased selected product transfer rates for residential, buy-to-let (BTL) and holiday let borrowers.
Increases of up to 0.25% have been made to residential pricing across some two-, three- and five-year fixed and discounted rates up to 95% LTV.
For BTL, changes have been made to two- and five-year fixed and discounted rates at 60% and 75% LTV, while holiday let pricing has gone up for two-year fixes and discounted five-year fixed rates at the same tiers.
Changes will apply from 3 February.
These increases follow rate hikes from Santander, NatWest and TSB last week.
Higher swap rates risk sapping momentum from mortgage market
Hina Bhudia, partner at Knight Frank Finance, said swap rates had gone up in the last two weeks as “stronger-than-expected economic data has prompted investors to reassess their outlook for UK borrowing costs”.
According to Chatham Financial, the two-year SONIA swap was 3.49% as of 29 January, up from 3.46% at the end of December, and the five-year swap rose from 3.63% to 3.69%.
She added: “If the economy remains this resilient, the Bank of England may only cut rates once more this year.
“That’s exerting upwards pressure on mortgage rates and several of the larger lenders, including Nationwide, NatWest and Santander have announced increases in the past week. These are fairly small increases at the moment, but they threaten to sap momentum from the recovery in activity that was strong through January.”
Nick Mendes, mortgage technical manager at John Charcol, said the rate increases were a reminder that mortgage pricing could change quickly, even with expectations for a base rate hold this week.
He added: “Swap rates have edged higher recently, so some lenders are reflecting that in their pricing. If swaps remain elevated, it would not be a surprise to see other high street lenders follow with similar repricing over the coming days.
“In the near term, it would be sensible to expect smaller, more incremental moves rather than significant reductions over the next few weeks. Competition will still exist, but pricing is likely to remain changeable as lenders respond to funding costs and demand.”
