Nationwide Building Society increases interest rates in mortgage price war 'surprise'
Interest rates: Andrew Bailey 'WORST management of monetary policy' since Robin Hood
Nationwide Building Society has raised interest rates across its range of mortgage products following the Bank of England’s base rate announcement yesterday.
The building society confirmed the rate hike on the same day the central bank opted to keep interest rates at 5.25 per cent.
According to Nationwide, mortgage rates will increase by 0.3 percentage points on selected products as of today.
This comes just days after the building society’s mortgage lender slashed rates across fixed rate mortgages by 0.2 percentage points.
Do you have a money story you’d like to share? Get in touch by emailing money@gbnews.uk.
Nationwide has raised mortgage rates once again
GETTY/NATIONWIDE
Homeowners have been forced to contend with rising mortgage repayments due to the Bank of England’s decision-making at it attempts to rein in inflation.
Despite the Consumer Price Index (CPI) rate jumping to four per cent last month, inflation has eased in previous months which led many analysts to believe a rate cut from the central bank would come sooner rather than later.
However, economists now forecast a significant reduction in the base rate will not be implemented until the later half of this year.
Speaking to Newspage, Justin Moy, the managing director of EHF Mortgages, highlighted how quickly Nationwide has raised rates so soon after cutting them last week.
He explained: “Given Nationwide was late to the table of rate cuts in January, it's surprising to see them react so quickly in February, but this does show that the cost of funds is increasing and lenders are having to readjust their rates with little notice.
“Nationwide does allow brokers to reserve deals in advance, which is an important benefit, especially in a market where rates are increasing.
“No change for existing clients looking for a new deal, but those looking to refinance or purchase will be affected.”
Despite concerns from lenders, other mortgage brokers cited the Bank of England’s recent announcement as a “modest silver living for homeowners”.
LATEST DEVELOPMENTS:
The Bank of England kept the base rate at 5.25 per cent yesterday
PAJonathan Bone, the mortgage lead at http://Better.co.uk , added: “Despite the unexpected increase in inflation towards the end of last year, the Bank of England decision-makers have held their nerve and maintained the base rate.
"Forecasts from experts suggest a potential decline in the base rate by July and even more so by the end of 2025 - positive news for those aspiring to step onto the property ladder.”
As of yesterday, the average two-year fixed residential mortgage rate came to 5.59 per cent, according to Moneyfacts. This is up from the day before. In comparison, the average five-year fixed residential mortgage rate is 5.23 per cent, up from 5.18 per cent yesterday.
A Nationwide spokesperson told GB News said: “We continually review our mortgage rates and have made a number of cuts in recent months.
“However, we’re making some increases on selected products today to ensure that our new business mortgage rates remain sustainable and that we can continue to offer the best possible service to brokers and borrowers alike.
“Even with these changes, Nationwide remains well-positioned in the market to support borrowers of all types and our rates for existing members switching remain unchanged.”
The Bank of England’s Monetary Policy Committee will announce any further changes to interest rates on March 21.