Daily Mail

Here we go again... mortgage rates under 4 pc get the chop

- By Adele Cooke a.cooke@dailymail.co.uk

HIGH street banks and building societies have started to increase rates on fixed-term mortgage deals again as experts warn that offers below 4 pc could soon disappear.

Rates had been falling since October, when five-year deals hit a 14-year high of 6.51 pc, according to analyst Moneyfacts. Last month, several lenders including HSBC and the Co-op launched five-year deals below 4 pc for the first time since the autumn.

But rates have started to turn again, with experts warning buyers should act quickly before the best offers are pulled. David Hollingwor­th, a broker at L&C, says: ‘These are significan­tly better deals than a few months ago but buyers should not keep waiting for rates to fall further.’

HSBC was the first lender to lower its rates below 4 pc in February but has today increased its five-year remortgage rate by 0.05 percentage points to 3.99 pc. And on Friday Yorkshire Bank hiked several of its fixed rates by up to 0.1 percentage points, with deals now starting at 4.48 pc.

Platform, an intermedia­ry of the Co-operative Bank, also withdrew its entire mortgage range last week as it was overwhelme­d by customer demand.

A fortnight ago the lender launched a five-year rate at 3.75 pc for those with a 60 pc stake in their property — the most competitiv­e rate on offer.

A spokesman says it expects to reintroduc­e mortgage deals next week.

The cost for banks to borrow money to lend to homeowners, known as the ‘ swap rate’, has been rising over the last week, making it less affordable for lenders to offer mortgages at competitiv­e rates.

The Bank of England is expected to hike its base rate again later this month which could further drive up the cost of borrowing.

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