Julia Harris, mortgage analyst at Moneyfacts, commented: “The shock announcement of last week’s base rate increase may have taken lenders by surprise, with most industry experts expecting the rise to occur in February or March. Some lenders, however, have been quick off the mark, with several already announcing increases to their SVRs and revised tracker rates.
“However there is a twist in the tail this time round. So far 12 lenders, predominately building societies, have withdrawn either selected fixed rates or their entire fixed rate range, without launching replacement products.
“So has there been a flurry of customers snapping up these ‘cheap’ deals, causing the societies to exhaust their tranches of fixed rate funds? Or could it be an opportunity to reprice, allowing a larger profit margin?
“With a further rate rise still on the cards for 2007, those consumers on a tight budget will need to act quickly before more of the current best buy fixed rate deals vanish.
“The next few months will be an interesting time in the mortgage market. We could see short term fixed rates of under 5 per cent vanish, or alternatively see associated arrangement/product fees increased in an attempt to keep them low, as lenders are forced to buy their funds at the now much higher rate offered by the money markets.”
