Nationwide Building Society has announced increases of up to 0.2% on fixed rate mortgages, as brokers warn this could be the “beginning of the end of low rates”.
The mutual will raise interest rates across first-time buyer, homemover, remortgage and product transfer fixed deals, on Friday, September 5. Mortgage brokers and financial advisors said this increases the likelihood that the Bank of England will hold the base rate at 4% in its next meeting. Justin Moy, managing director at EHF Mortgages said: “When Nationwide announces changes to their mortgage range, the market listens. Though increases of up to 0.2% are not a disaster for borrowers, this does put everyone on notice that perhaps we have seen the bottom of the cheapest deals for now.”
Katy Eatenton, mortgage and protection specialist at St Albans-based Lifetime Wealth Management, said the move signalled that rates are now set to rise across the board.
She added: “Nationwide is the latest of the main lenders to announce rate increases, which confirms this is the beginning of the end of the super low rates. This indicates we are unlikely to see any movement to the base rate at the next meeting of the Bank of England (BoE).”
Cameron Scott, a broker at Archie John Financial, said other banks may also raise their rates in line with this.
He said: “Nationwide increasing fixed rates by up to 0.2%, although not catastrophic, reflects the uncertainty around inflation and future rate cuts. I wouldn’t be surprised to see similar lenders follow suit in the short term.”
Ben Perks, managing director at Stourbridge-based Orchard Financial Advisers, said it indicates a “bump in the road”.
He said: “Nationwide are a major player and when they increase their rates others tend to follow. Looks like another bump in the road to recovery for the mortgage market.”
Elliott Culley, director at Switch Mortgage Finance, said uncertainty is leading to rate increases.
He continued: “Nationwide increasing their rates keeps them in line with other lenders who have upped rates recently due to the rise in swap rates. There is uncertainty in the economy, and inflation has been creeping up. This has laid the foundations for a period of uncertainty where we may see further increases in the market.”
