High street lenders return to market with fixed rate changes

HSBC made its second raft of increases this week while Barclays chose to reduce some of its rates on offer.

A number of high street banks have made changes to their fixed rate mortgages over the past seven days. It comes after Moneyfacts’ data recorded a recent drop in mortgage availability, with over 7% of the market withdrawn in the week leading to the end of May.

Much of this was to do with the Office for National Statistics’ inflation figures for April, which suggested the Bank of England might have to raise rates further to quell the increasing cost of living.

From 24 May, when the ONS released its latest figures for inflation, to 4 June, the total number of mortgages on the market dropped by 581. However, there are signs of a recovery, with 426 products returning as of today.

These mortgages are returning at higher rates. The average two year fixed deal now stands at 5.92%, up 0.10 percentage points from last Thursday. If this figure were to breach 6%, it would be the first time since December last year, when fixed rates were on a downward trajectory after Rishi Sunak took over from Liz Truss as Prime Minister.

The average five year fixed rate is also on the rise and now stands at 5.56%, up from the 5.17% at the beginning of the month. According to Moneyfactscompare.co.uk calculations, this translates to roughly £46 more a month for the initial term. These estimates are based on a borrowed sum of £200,000 over 25 years, but you can personalise your results by using the calculator below.

Part of the reason why there is an increase in rates is because some of the UK’s largest mortgage lenders have repriced their offerings over the past week. These include HSBC, NatWest and Nationwide BS.

Last Friday, high street lender HSBC pulled its intermediary range from offer. However, in communication with Moneyfacts, it stressed it was still open for new business and that all product rates for its existing customers were still available.

“We remain open to new mortgage business, however, to ensure that we meet our customer service commitments we occasionally need to limit the amount of new business we can take each day via brokers,” an HSBC spokesperson said in a statement.

On Monday HSBC increased some of its fixed rates by 0.45 percentage points at most, and then implemented a further increase to some of its other products today.

While other lenders were increasing their rates, Barclays Mortgages decided to slash some of its two and five year fixed rates for homemovers and first-time buyers yesterday.

In addition, it also reduced some of its product fees on these mortgages by £100.

After these reductions, it now offers a two year fixed deal at 5.08%. This comes with a product fee of £899 and can finance up to 60% of your home.

A free valuation is included to sweeten the deal and lower rates could be available for its Premier banking customers.

To see how much this deal would cost you per month, use our calculator below.

Last Friday Nationwide BS increased several of its fixed rates by up to 0.20 percentage points. However, on the same day, it reduced its variable tracker rates by 0.85 percentage points.

One of its trackers which reduced includes its two year option, which now offers a rate of 4.89%. It can finance up to 80% of your home.

In comparison, it offers a two year fixed rate of 5.19% for remortgage borrowers. This can finance up to 80% of your home, comes with product fees of £999, and includes a free valuation and £500 cashback or free legal fees as incentives.

Click on the link below to see what mortgage you could get with Nationwide BS today.