Mortgage rate increases continue to flow as a fourth lender joins in this month.
Hot on the heels of Halifax recent decision to increase the variable rate came Santander who are increasing rates for new borrowers. Nat West are also to increase their rates on 200,000 mortgages by a quarter to 4%.
The Bank of Ireland sell mortgages in the UK under the brands Bristol and West and the Post Office. Due to the cost of funding mortgages they claim they too must increase their standard variable rate (SVR). Bristol and West customers will pay an extra 1.5% when the rate goes up from 3% in June to 4% then another rise in September will take the rate to 4.49%.
The Post Office branded mortgages are not yet included in the change of rate.
Why are Mortgage Interest Rates on the Increase
- All the lenders concerned are claiming that the cost of retail and wholesale funding has now increased.
- The Bank of England are due to close the special liquidity scheme that provided emergency mortgage funding.
- Cynics would say that rates are being increased because the lenders think they can get away with it! If that is true expect other lenders to find ways onto the band waggon very shortly
- Despite bank base rate being held for the 36th month in succession at 0.5% the government seem happy to see the SVR begin to edge upwards.