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UK mortgage lenders raise rates as borrowers brace for higher deals
For a typical £250,000 loan on a two-year fixed deal, borrowers may face about £120 more per month than they would have had at the start of March, when the US-Israeli strikes began.
Nearly all major UK mortgage lenders have increased the cost of new home loans in recent days, leaving borrowers expecting rate cuts with uncertainty about whether further increases are coming, according to BBC Business.
Analysts say borrowers who need a new deal soon should act now, because the end of a current fixed term can mean moving to a higher rate on their next contract. Moneyfacts data cited by BBC Business indicates that someone whose five-year fixed deal is ending could pay more than £5,000 extra per year on the next deal under a typical rate, assuming the same borrowing amount.
Many lenders allow borrowers to lock in a new deal up to six months before their current one ends, with the option to switch if pricing improves before the new rate takes effect. BBC Business adds that fixed-mortgage rates generally stay unchanged until the term expires, after which borrowers choose a new product.
BBC Business links the pressure to broader economic uncertainty and rising UK government borrowing costs, including a recent debt sale where a 30-year UK bond was issued with a yield of 5.82%, the highest since 1998. The outlet says Bank of England Governor Andrew Bailey is expected to face questions about the bond market upheaval when he appears before the Treasury Committee.