Product withdrawals and rate rises widen across residential and BTL ranges
Specialist buy-to-let lender Fleet Mortgages said it would withdraw all fixed-rate products at later today, citing “extreme market volatility.”
“We’re writing to let you know that due to extreme market volatility, we are temporarily withdrawing all existing fixed rate products, including product transfers, at 5pm tonight,” Fleet Mortgages stated in an email sent to brokers on Monday.
“Our Tracker products remain unchanged. We intend to release a new range of Fixed Rate products as soon as possible.”
The move follows Coventry for Intermediaries’ withdrawal of all its new-customer products from 8pm tonight, writing to brokers on Friday to give notice. The lender said “due to current market conditions, we’re giving as much notice as possible for product closures” and that the “launch of new products will be confirmed as soon as possible”.
In a separate update, Coventry also set out increases to fixed rates for existing residential and buy-to-let borrowers from Wednesday, 25 March.
Meanwhile, Halifax said it would make changes to its mortgage range from Tuesday, 24 March, with rate increases on fixed-rate products across purchase, remortgage, product transfer and further advance.
Nationwide has also increase pricing, with some rates up by 0.3%.
Other lenders are also moving quickly, following sharp movements in swaps, leaving brokers with limited time to secure current pricing before further withdrawals and repricing later on Monday and in the days ahead.
TSB said it would increase pricing on Wednesday. The changes affect product transfer and additional borrowing, with rises of up to 0.2% across parts of its residential two- and three-year fixed product transfer range, and up to 0.1% on residential five-year fixed product transfers.
In buy-to-let product transfers, two-year fixed rates are set to rise by 0.1% up to 75% loan to value, while some five-year fixed rates with a £995 fee up to 60% loan to value will increase by 0.05%. Residential additional borrowing fixed rates will rise by up to 0.2%, and two-year buy-to-let fixed additional borrowing rates by 0.1%.
The Co-operative Bank said it would remove selected products at 5pm, and release updated products on Tuesday.
Perenna also announced rate increases across its range from 5pm today.
“A sharp repricing in expectations for further Bank Rate rises has already pushed swap rates higher, and that is now feeding directly into mortgage pricing,” said Nicholas Mendes (pictured right), mortgage technical manager at London broker John Charcol.
“The latest SONIA swap rates show the move clearly, with two-year money at 4.483%, three-year at 4.420% and five-year at 4.346%. That matters for mortgages because lenders price fixed rates off future funding costs, not simply where Bank Rate sits today.
“The immediate impact is likely to be further upward pressure on fixed mortgage rates, along with more short-notice withdrawals as lenders try to keep pace with fast-moving markets. Mortgage pricing does not wait for the Bank of England to come to fruition. If markets keep pricing in higher rates from here, lenders are likely to continue repricing in advance.”
Mendes pointed out that while comparisons with the uncertainty seen after the Liz Truss mini Budget were understandable, the cause of the current rate volatility is different.
“In 2022, the shock was driven by domestic fiscal credibility,” he explained. “This time, the pressure is coming from a sharp shift in rate expectations, higher swap pricing, and concern that policy may need to stay tighter for longer. That does not automatically mean a return to those peak mortgage rates, but it does raise the risk of further upward moves in the near term.
“For borrowers, the message is not to sit back and hope. Anyone buying should speak to a broker early, because lenders can move quickly and the best options do not always stay around for long. For those coming up to a remortgage, it is even more important. In most cases, a new rate can be secured three to six months before an existing deal ends. If rates improve before completion, there is often scope to switch to something lower, meaning you save a significant amount over the term of the mortgage. Waiting and hoping is not a strategy in a market like this.”
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