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Nationwide becomes latest to up mortgage costs ahead of interest rate rises

·2-min read
(Paul Faith/PA) (PA Archive)
(Paul Faith/PA) (PA Archive)

NATIONWIDE Building Society today put up the cost of some of its most popular mortgages, the latest sign that home loans are getting more expensive.

With the City betting on a rise in interest rates, perhaps as soon as next month, lenders are already binning their cheapest deals and replacing them with more costly offerings.

While the market remains competitive, financial advisers say now is a good time to lock in the cheapest deal possible, given that bank base rates are likely to rise from today’s low of 0.1% to perhaps 1% by next summer.

Nationwide said:

++ Selected two, three and five year fixed rate up to 75% LTV will increase by up to 0.25%

++ Rates for existing members moving home, switching to a new deal or looking for a further advance at up to 75% LTV will be increased by up to 0.22%

Some other rates have actually been cut, a clear challenge from the mutual to its stock market listed rivals.

Yesterday it emerged that Barclays and Halifax, the biggest mortgage lender owned by Lloyds Bank, shifted their rates. It announced the moves to mortgage brokers but not to the wider public.

Critics of the bank’s note that they have moved well ahead of an actual increase in rates from the Bank of England.

Banks say financing loans is already move expensive due to the City expectation that rates are going up.

Elliot Nathan of top mortgage broker John Charcol said: “Banks are going to start increasing their fixed rates once we see Bank of England put up the base rate coupled with the rising rate of inflation. Once we start to see the first-rate rise, the banks will follow suit and we may not see interest rates as low as these again. For any borrowers on a variable rate, now is the time to secure a fixed rate to ensure the cost of your mortgage does not increase over the next few years”.

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