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  • Writer's pictureMatthew Pigrome

Important Update: Mortgage Rate Increases by Britain's Largest Building Society

As the Principle at Mortgage321, I want to update you on the recent changes in mortgage rates by Britain's largest building society.

They have announced that they will be increasing some of their mortgage rates for new borrowers starting this Friday. This adjustment is aimed at ensuring that their rates remain sustainable in the current economic environment.

These rate increases will only impact customers who are taking out a new mortgage deal. For first-time buyers and those looking to move home, rates will rise by between 0.05 and 0.40 percentage points on products up to 95% loan-to-value (LTV). For individuals considering remortgaging, rates will increase by between 0.05 and 0.40 percentage points on products up to 90% LTV.

In addition, switcher, additional borrowing, and existing customer moving home rates will be subject to an increase of 0.05 to 0.45 percentage points. Shared equity rates will also see an increase of up to 0.45 percentage points.

This decision comes amidst recent inflation data from the Office for National Statistics (ONS), which showed a slowdown to 8.7% in April. However, this decline was not as significant as anticipated, with experts expecting a drop to 8.2% in April.

The rise in swap rates, which lenders use to price mortgages, has contributed to this adjustment, and other lenders have also made similar changes to their mortgage rates. The market reaction to inflation and interest rate expectations has been surprising, leading to increased fixed-rate mortgage pricing.

At Mortgage321, we remain confident that mortgage rates will peak soon and that any future reductions will be as swift as the recent rises. It's important to remember that swap rates can be volatile, and we expect them to settle down over time.

The decision by Nationwide to increase their mortgage rates is part of their effort to maintain sustainability amid the fluctuations in swap rates. It's a trend we have observed from other lenders during uncertain times as they adapt their pricing strategies.

We advise anyone considering a new mortgage to seek expert advice to ensure they understand the full package of any deal and find the right solution for their needs. The market conditions and interest rate volatility make it essential to act quickly, as rates can change rapidly.

As we continue to monitor the situation closely, we will provide you with further updates and guidance to navigate the evolving mortgage landscape.

Matthew Pigrome

Principle at Mortgage321

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