Major lenders continue to reprice as Middle East tensions stoke inflation fears and push up swaps
NatWest and Barclays have both announced further increases to fixed mortgage rates, in the latest sign that rising market funding costs are feeding through to pricing.
The moves come as ongoing geopolitical tension in the Middle East has added to inflation concerns and market volatility, lifting swap rates that underpin many lenders’ fixed-rate deals.
NatWest has announced increased rates across its new business, existing customer and additional borrowing ranges, with the changes due to take effect tomorrow, March 13.
The lender has raised two-year fixed purchase rates at 60%–95% loan-to-value (LTV )by up to 35 basis points (bps), with most products up 25bps. The 60% LTV two-year fix has risen from 3.72% to 3.97% with a £1,495 fee, while the 95% LTV equivalent has moved from 4.70% to 5.07% with no fee.
Five-year fixed purchase rates at 60%–95% LTV are up by as much as 30bps, including the fee-free 95% LTV deal from 4.79% to 5.09% and the fee-free 60% LTV deal to 4.32%.
Remortgage rates have also increased. The fee-free two-year fix at 60% LTV is set to rise from 4.13% to 4.38%, while the two-year fix at 75% LTV with a £1,495 fee has gone from 3.89% to 4.09%. Five-year remortgages at 60% LTV have been lifted by 25bps, including to 4.19% with a £995 fee and to 4.14% with a £1,495 fee.
NatWest has also increased selected first-time buyer, shared equity and green products by up to 25bps, alongside higher buy-to-let and additional borrowing rates. In buy-to-let, a two-year fixed purchase at 75% LTV with a £3,499 fee has risen to 3.88%, while the £3,999-fee equivalent has moved to 3.63%.
Meanwhile, Barclays has announced a new round of rate hikes across its residential ranges, including purchase-only, remortgage-only, and its existing customer reward products.
The changes, also effective from tomorrow, include increases of around 30bps on a wide set of two-, three- and five-year fixed rates, spanning mainstream and higher-LTV lending, green home products, and specialist sub-ranges.
In the purchase-only range, for example, a two-year fixed at 60% LTV with an £899 fee has moved from 3.80% to 4.10%, while the fee-free equivalent has increased from 4% to 4.30%. At 95% LTV, Barclays’ fee-free two-year fixes have risen from 4.7% to 5%, and fee-free five-year fixes have moved above 5% (including 4.81% to 5.11%).
Across remortgage-only products, two-year fixed rates with a £999 fee have similarly been lifted by around 30bps at key LTV bands.
Aaron Strutt (pictured right), product director at Trinity Financial, said the latest lender moves underlined the direction of travel for pricing across the market.
“The rate hikes are still coming through,” he said. “The good news is that NatWest will still have one two-year fix below 4% at 3.97% with a £1,495 fee for borrowers with a 40% deposit.
“The bad news is that most of NatWest’s rates are going up by 0.25% and a couple by 0.35%. This is the second time NatWest has had to increase rates in a week. NatWest’s five-year fixes will start from 4.14%.
“Barclays rates up by 0.3% pretty much across the board. It doesn’t look like the bank will have any sub-4% fixes any more.”
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