Halifax also gave an update on Monday afternoon
Two major mortgage lenders announced further rate rises on Monday afternoon. It came soon after Donald Trump posted on Truth Social that the US and Iran, over the past two days, have had productive conversations regarding “a complete and total resolution of our hostilities in the Middle East”.
Nationwide is raising selected mortgage fixed and tracker rates by up to 0.30 per cent, while Halifax is also implementing rate increases on all fixed rate products tomorrow across its purchase, remortgage, product transfer and further advance ranges.
Stephen Perkins, managing director at Yellow Brick Mortgages, a nationwide mortgage broker, said: “Despite suggestions from Trump and the White House suggesting the war in Iran may be ending sooner rather than later, lenders seem to be hedging their bets.”
He added: “Lenders continue to increase rates as the full economic impact of the Middle East disruption starts to bite. Hopes of rates swiftly going back down may be wishful thinking.”
Earlier today, Andrew Montlake, CEO at London-based Coreco, had predicted more rate hikes this week amid the ongoing uncertainty and so it proved to be.
He warned: “It’s starting to look bleak for borrowers and people should not hesitate to lock into a rate if they are due to buy or remortgage in the summer months. You are locking in to protect against future rate rises, but if the war does end in the not-too-distant future and rates edge down again, there will potentially be an opportunity to switch onto a lower rate before your completion date. Failure to act and lock in now could cost borrowers a lot of money given the direction rates are headed in.”
Omer Mehmet, managing director at Welling-based Trinity Finance, said: “Never has it been more important for borrowers to lock into a rate. We have had wholesale and hefty rates rises in recent weeks and now it looks like another wave of hikes from lenders could be about to pound borrowers. Once Nationwide and Halifax move, others often follow.”
David Stirling, Independent Financial Adviser at Belfast-based Mint Wealth, added: “One diplomatic breakthrough won’t undo a week of market nerves and mortgage rates are still catching up with the chaos. Geopolitical turbulence continues and these hikes from Nationwide and Halifax demonstrate how nervous lenders are in the current market.
“Expect more lenders to pull products or hike rates rapidly in the immediate future. Even whispers of peace abroad aren’t enough to bring calm to monthly repayments at home.”
Rohit Kohli, director at Romsey-based The Mortgage Stop, believes “rates won’t settle until global uncertainty does and that uncertainty has one very large, and very loud source right now”.
He continued: “Trump’s latest Iran comments may have caused a brief positive ripple, but markets have been burned before by announcements that don’t hold. Until the chaos actually stops, lenders will keep repricing upward. Borrowers need to plan around that reality.”
However, Justin Moy, managing director at Chelmsford-based EHF Mortgages, said that today’s rate increases by Nationwide and Halifax were likely implemented towards the end of last week when markets were particularly volatile.
But he warned: “Swap rates are still rising, Trump’s announcement seems one-sided and, inevitably, borrowers and businesses will suffer as inflationary pressures from high oil prices continue to make for a very uneasy situation. High Street lenders like Nationwide have been left with little option but to undo the work of the past three or four months with higher rates yet again.”
