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Mortgage deals below 4% may not last long, experts warn as lenders start raising rates on temporary deals
Major banks and building societies have begun raising interest rates on fixed-term mortgages again, as experts warn that offers will fall below 4 percent. can disappear quickly.
Rates had fallen since October, when five-year deals hit a 14-year high of 6.51 percent, according to analyst Moneyfacts.
Last month, several lenders, including HSBC and the Co-op, launched five-year deals below 4 percent for the first time since the fall.
Bottom out? Mortgage rates had been falling since October when five-year deals hit 6.51%, but experts warn buyers to act quickly before the best offers are withdrawn
But prices are starting to turn again, with experts warning that buyers must act quickly before the best offers are withdrawn.
David Hollingworth, a broker at L&C, says: ‘These are significantly better deals than a few months ago, but buyers should not wait for rates to drop further.’
HSBC was the first lender to cut its rates below 4 percent in February, but today raised its five-year mortgage rate by 0.05 percentage point to 3.99 percent.
And on Friday, Yorkshire Bank raised several of its flat rates by up to 0.1 percentage point, with deals now starting at 4.48 percent.
Platform, an intermediary of the Cooperative Bank, also withdrew its entire mortgage range last week as it was overwhelmed by customer demand.
Two weeks ago, the lender launched a 3.75 percent five-year interest rate for those with a 60 percent interest in their property — the most competitive rate on offer.
A spokesperson says it expects to introduce mortgage deals again next week.
The cost for banks to borrow money to lend to homeowners, known as the “swap rate,” has risen over the past week, making it less affordable for lenders to offer mortgages at competitive rates.
The Bank of England is expected to raise its key interest rate again later this month, which could further push up the cost of borrowing.
a.cooke@dailymail.co.uk