Mortgage News | November 2020
By Simon Gilvey – Broadland Consultants Managing Director
Some of Britain’s biggest mortgage lenders have recently increased interest rates by as much as a quarter, as banks try to dampen demand from home buyers.
Banks and building societies had been overwhelmed with mortgage applications thanks to the booming property market. In turn, lenders have increased their interest rates to quell the demand to maintain service levels.
Halifax recently announced that several of its rates would rise by 0.61 percentage points. Customers with a 20pc deposit are among those hardest hit by the move. One of the bank’s two-year fixed-rate deals increased by a rise of 24pc.
A buyer taking out this mortgage on a home worth £237,963, the average house price, will now pay £914 a month for repayments versus £854 previously, based on a 25-year term.
Other major lenders have also increased rates. For customers with a 15pc deposit, Nationwide’s five-year fixed-rate loan increased by a rise of 10pc. The same borrower taking out a two-year fix with NatWest saw rates rise by a 5pc increase.
Banks are currently concerned about being flooded with applications from all types of customers and are spreading higher rates to loans for medium and larger deposits.
Broadland Consultants Limited is an appointed representative of SANLAM PARTNERSHIPS LIMITED, which is authorised and regulated by the Financial Conduct Authority. FCA No. 521208. Please note: the FCA does not regulate in relation to the sale and purchase of investment property.. Company No. 05599047