Fixed-rate mortgage deals rise again amid ‘market uncertainty’

Leading lenders increased rates on their fixed mortgage deals yesterday in response to “market uncertainty”, adding to pressure on homebuyers and those wanting to remortgage.

Barclays, HSBC, NatWest, Accord Mortgages (part of Yorkshire building society) and Leeds building society have all raised the cost of some fixedrate deals. In some cases these have risen by up to 0.4 percentage points.

Money market swap rates – which largely determine the pricing of new fixed deals – “have ticked up slightly” in response to Bank of England interest rate expectations, prompting lenders to reprice some deals, said Danny Belton, the head of lending at broker firm Mortgage Advice Bureau.

A smaller than expected drop in inflation in March caused some economists to push back forecasts for when the Bank might start to cut interest rates. City investors are pricing in two rate cuts by the end of the year.

While some lenders such as Accord have increased selected rates by up to 0.4 percentage points, others such as NatWest have opted for smaller rises: it has lifted some of its two and fiveyear “switcher” deals for existing customers by 0.1 percentage points.

Nicholas Mendes, the mortgage technical manager at the broker John Charcol, said lenders had “adjusted their positions in response to market uncertainty,” though borrowers “are unlikely to experience the same volatility and high rates as last year”.

Moneyfacts, the financial data provider, said yesterday that the average rate on a new fixed-rate deal lasting for two years had nudged up slightly to 5.83% from 5.8% at the start of this month. The typical rate on a new fiveyear fix stands at 5.4% – up from 5.38% at the beginning of April. However, the cheapest two- and five-year “bestbuy” fixes this week were priced at 4.46% and 4.13% respectively.

Rightmove has named Aberdeen as the least expensive city to be a first-time buyer, with St Albans in Hertfordshire the most expensive outside London, followed by Cambridge and Winchester.

Carlisle was the cheapest city for renters, with Oxford the most expensive to rent outside London.