Julia Harris, mortgage expert at Moneyfacts.co.uk, responded to the changes: “With Abbey starting the ball rolling, the last three days we have seen a surge by some of the big named lenders raising interest rates on their variable mortgages for new customers by up to 0.25%.
“It’s not unusual to see mortgage rates moving during periods of base rate stability. However whilst lenders could be hedging against the possible uncertainty in the mortgage market, there could also be many other reasons underlying these changes.
“Lenders frequently reprice their mortgage portfolios dependent on their current strategy within the mortgage market, whether they want to increase or decrease market share. They may have been predicting base rate rising to 6% before now and factored this into their pricing plans.
“These charges should not spark fear that the sub prime crisis has hit the UK prime market – it’s far to early for the crisis to have reached the prime market, with tracker mortgages often financed from the lender’s balance sheet, and only a few known lenders reliant on the current volatile LIBOR market.
“If the provider remains liquid, the UK housing market stable and arrears low, there is no immediate concern.”
Recent changes are as follows:
- Abbey has increased rates by up to 0.15%
- Bank of Scotland increased selected rates by 0.10%
- BM Solutions increased selected rates by up to 0.20%
- Halifax increased selected rates by 0.10% and 0.20%
- CHL has withdrawn all its trackers and is yet to announce replacements
- Royal Bank of Scotland has revised its variable for term products by 0.25%
- Standard Life increased selected rates by 0.20%
