Brokers say securing a rate at the earliest opportunity is the best advice for clients
Volatility in wholesale markets is feeding directly into UK mortgage pricing as lenders respond rapidly to sharp movements in swap rates.
Elliot Cotterell, director of Windsor Hill Mortgages, said the transmission from funding markets into mortgage products is already clearly visible.
“Recent geopolitical tensions are now feeding through into UK mortgage pricing via swap rates. We have already seen lenders withdraw and reprice products, which shows how quickly wholesale market volatility can impact borrowers,” he said.
“Over the past couple of days, a large number of products have already been withdrawn and repriced, so the pass-through is no longer theoretical - it is happening now.”
Lenders say the scale and speed of recent swap-rate movements have forced rapid action across the market.
Graham McClelland, CEO of Generation Home, said the scale of recent market movements has left lenders with little choice but to adjust pricing.
“The recent, rapid, and significant moves in swap rates have forced lenders to act quickly. While the bigger balance sheet lenders typically try to absorb smaller moves, the scale of the recent volatility means that almost everyone has had to take some action. This is either rapid repricing, pulling products, or some combination of both.”
Borrowers are also being prompted to move quickly to secure deals before further repricing filters through. Craig Head, director at Mortgage Required, said heightened media coverage of rate changes can accelerate borrower behaviour during periods of market uncertainty.
“There is a significant rush. In situations such as this, the news of mortgage rate rises becomes big news and is reported on almost all news sources. As such it tends to spread panic amongst borrowers who are currently rushing to secure deals that they expect to be withdrawn.”
Head said brokers have long advised clients to secure deals as early as possible when markets become unsettled.
“Securing a rate at the earliest point will have been something that brokers have been advising their clients to do, in order to give some protection to situations just as this.”
Lenders say borrowers should also remember that submitting a mortgage application can protect them if rates later improve.
McClelland said customers are not locked into higher pricing if lenders reduce rates after an application has been submitted.
“A mortgage application locks in the worst possible rate. If a lender subsequently reduces rates, the customer can move to the lower rate while preserving their outstanding application. That is why it almost always makes sense for a customer to submit an application when they are ready to do so.”
With swap markets still shifting, brokers say borrowers are increasingly prioritising certainty over waiting for rates to fall further.
