Mortgage lenders put up interest payments before Bank’s base rate hike
Banks and building societies had already begun putting up mortgage interest payments before the Bank of England announced its latest base rate hike to 2.25% – piling more pressure on homebuyers and owners.
For some, the increased charges could add thousands of pounds to their total home loan costs over the next couple of years.
Santander, NatWest and HSBC are among the lenders that have this week increased their mortgage rates for new borrowers – in some cases by as much as 0.8 percentage points.
Other banks and building societies are expected to quickly follow suit and reprice their deals upwards now that the Bank has raised interest rates by 0.5 percentage points – the seventh increase in a row since December.
Santander hiked many of its home loan rates on Wednesday. That means someone looking to remortgage with the lender through a broker on a two-year fixed rate that lets them borrow 90% of the property’s value, will now pay 4.89% with no fee.
That is 0.8 percentage points more than the amount that someone who signed up for the equivalent deal at the start of this week would have been charged.
Similarly, some of Santander’s two-year fixed rate deals aimed at homebuyers have had their rates increased by 0.7 percentage points.
For example, a two-year fix aimed at buyers with a 10% deposit has seen the pay rate raised from 4.04% to 4.74%. For someone borrowing £250,000 on a repayment basis on a 25-year term, that difference adds up to an extra £97 a month – a monthly payment of £1,423 versus £1,326 – or £2,328 extra over the two-year initial period.
NatWest raised some of its rates by 0.35 percentage points on Wednesday, so a two-year fix for a homebuyer using a broker and borrowing 60% of the property’s value that had a pay
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