Rates are beginning to accelerate from their record lows in preparation for a base rate rise.
A number of the leading lenders – such as NatWest, Nationwide and Tesco Bank – have put up the rate on their five-year fixed deals recently or withdrawn the product completely.
David Hollingworth, from broker London and Country Mortgages, was quoted by the Telegraph as saying: “You tend to see a domino effect once a handful of lenders start changing their pricing. Borrowers looking to fix should not wait until just before a base rate rise.”
He added rates will inevitably continue to edge up this year, as an increase in the base rate approaches.
Head of Knight Frank Finance Simon Gammon was quoted as saying that, even though the Bank of England has pledged the base rate will not go up in the immediate future, the likelihood of a rise earlier than the forward guidance of 2016 is “building dramatically”.
Mr Gammon explained this is why swap rates are going up, even though the base rate was held at 0.5 per cent this week.
The refocusing of the Funding for Lending Scheme has been attributed to the fact it is more expensive for lenders to access money.
