Nationwide hikes mortgage rates as swaps rise

Get the free Morning Headlines electronic mail for information from our reporters the world over

Sign as much as our free Morning Headlines electronic mail

Nationwide revealed on Monday that the rate of interest for a few of its mortgages shall be rising this week.

The constructing society stated that its mortgage rates would rise by as much as 0.25 share factors from Tuesday, though some will rise by a lot much less.

First-time consumers and residential movers can pay 4.49% curiosity for a two-year mortgage, whereas these remortgaging can pay 4.54%.

Nationwide stated: “Swap rates, which are a key factor in mortgage pricing, have been rising and as a result we need to increase selected rates to ensure our rates remain sustainable.”

It comes as common two-year fastened mortgage fee available on the market recorded its largest month-on-month fall since December 2022 in February, in response to a monetary data web site.

Across all deposit sizes, the typical two-year fixed-rate mortgage had a fee of 5.56% in the beginning of February 2024, down from 5.93% in the beginning of January this yr.

The 0.37 share level fall was the largest month-to-month lower recorded by Moneyfacts since December 2022.

Five-year fastened mortgage rates edged down from 5.55% to five.18% on common, evaluating the beginning of January 2024 with the beginning of February this yr.

Rachel Springall, a finance professional at Moneyfacts, stated: “Borrowers searching for a new mortgage deal may be delighted to know fixed mortgage rates continued their downward trend, with the average two-year fixed rate dropping by its biggest margin since December 2022.

“Those borrowers who have waited patiently in recent months to re-finance, or indeed are preparing for when their mortgage deal expires, would be wise to review rates, as lenders are closely monitoring the volatile swap rate market, which tends to influence fixed-rate pricing.

“There have been big expectations for fixed rates to fall further, and whether now is the right time to refinance will come down to an individual’s circumstances.

“Lenders are in constant review of their ranges, and it is likely rates will fluctuate in the coming weeks due to the noises surrounding future rate expectations.”

Some debtors could also be sitting on their lender’s customary variable fee (SVR), whereas they resolve what to do.

According to Moneyfacts, the typical SVR in the beginning of February was 8.17%.

Ms Springall added: “The average two- and five-year fixed rates are much lower than the average SVR. Seeking advice from an independent broker is wise to work out if an individual could save a decent sum on their monthly repayments by changing their mortgage deal.”

Ms Springall stated mortgage rates have additionally fallen within the first-time purchaser bracket of the market.

She stated: “The average two-year fixed-rate mortgage at 95% loan-to-value (LTV) has dropped below 6% for the first time since May 2023 (sitting at 5.84% at the start of February), much lower than six months ago, when it was just over 7%.

“Product choice has also increased at this LTV bracket.”