This week, we have witnessed a fascinating shift in the mortgage market, with Skipton increasing its rates for certain borrowers while other major lenders, including Halifax, Coventry, HSBC, and Virgin Money, are reducing rates for various mortgage products. Why have Skipton increased their rates? What do they know that we don’t? Let’s delve into the details of these changes and what they mean for borrowers when a lender increases mortgage rates.
Skipton’s Increases Mortgage Rates
Skipton Building Society has today announced that they have made adjustments to their mortgage offerings. The key changes released by Skipton include rate increases on their residential 2-year fixed rates at 85% and 90% loan-to-value (LTV). Additionally, they have raised rates on their residential 5-year fixed no-fee products. These changes primarily affect borrowers with lower deposits, signalling a potential tightening of lending for those with less deposit to put down.
Coventry’s Rate Reductions
In contrast to Skipton’s moves, Coventry for intermediaries has announced rate reductions on selected residential rates by up to 0.36%. These rate cuts are available for fixed-rate options spanning 2, 3, and 5 years. Coventry is not only reducing rates but also expanding its product range for borrowers. They have introduced 2- and 3-year fixed rate options within the 95% loan-to-value (LTV) bracket, supplementing the existing 5-year fixed rate choices.
These new products are aimed at supporting first-time buyers and come with a tempting £500 cashback incentive. Furthermore, Coventry has also reduced selected buy-to-let products by up to 0.10%, offering a range of options for different types of borrowers.
HSBC’s Rate Reductions and New Offerings
HSBC has made a series of strategic moves to attract and support a wide range of borrowers. Similarly, to most lenders, HSBC has introduced new lower rate products. For first-time buyers and home movers, they’ve reintroduced a 3-year fixed fee-saver product at a 95% LTV, sweetening the deal with a £350 cashback incentive.
For existing residential customers, HSBC is reducing rates on 2- and 5-year fixed standard mortgages at various LTVs, ranging from 60% to 90%. They are also adjusting rates for international residential customers.
Implications for Borrowers
So, what can we say about these changes? Those with higher deposits and the willingness to commit to longer-term fixed-rate mortgages are the primary beneficiaries of the rate reductions it seems. These individuals can lock in lower rates and potentially save on their monthly mortgage payments, making homeownership more affordable and attractive.
On the other hand, Skipton’s rate increases, primarily targeting those with lower deposits, may make it slightly more challenging for first-time buyers or borrowers with limited equity. It’s crucial for such borrowers to evaluate their options carefully, considering the impact of increased interest rates on their budget and long-term financial goals.
Speak To A Mortgage Expert
It is clear that the mortgage market is experiencing an intriguing shift this week, with Skipton increasing rates for certain borrowers while other major lenders are reducing rates and expanding their product offerings. These developments reflect the volatile state of the mortgage market in the UK, and we as mortgage brokers want to make sure that all of our clients are as informed and up to date as possible. If you want to discuss mortgage products and rates, call or message our team of mortgage experts today. We are here to help you.