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Bank Rate Cut Hopes Fade: HSBC, Barclays, NatWest Raise Mortgage Rates

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Bank Rate Cut Hopes Fade: HSBC, Barclays, NatWest Raise Mortgage Rates

HSBC, Barclays, NatWest, and Accord (the broker-only lending arm of Yorkshire Building Society) are raising specific fixed mortgage rates due to the escalating borrowing costs.

Swap rates, which indicate the rates at which banks and building societies lend to each other, surged last week in response to the latest inflation figures. Although the official inflation rate dipped to 3.2% from 3.4% in March, the reduction was smaller than anticipated. This suggests that interest rates may persist at higher levels for a longer period, with a potential rate cut by the Bank of England now more probable in the autumn rather than June, as previously hoped.

HSBC is implementing rate hikes across various residential and buy-to-let mortgage deals, as well as on its product switcher deals for existing customers seeking a new rate. These new rates, accessible directly and through brokers, will take effect tomorrow (23 April). The increases cover two, three, and five-year purchase and first-time buyer deals ranging from 60% to 90% loan-to-value (LTV), along with residential remortgage rates from 60% to 75% LTV.

Similarly, Barclays is raising selected fixed rates for residential purchases and remortgages, effective from tomorrow. Notably, the lender’s rate adjustments include an increase in its five-year fixed rate for remortgages from 4.67% to 4.77% (at 60% LTV with a £999 fee), while two-year equivalent remortgage rates will rise from 4.84% to 4.94%.

NatWest has also raised its two and five-year fixed-rate product switcher deals by up to 0.1 percentage points, with the new rates becoming effective tomorrow. These rates start from 4.99% over two years with a £495 fee or from 4.49% over five years with a £995 fee (both deals at 60% LTV).

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Accord has followed suit by increasing selected residential fixed rates by up to 0.4 percentage points, effective from tomorrow. These rate hikes will affect new borrowers seeking deals at 75% to 95% LTV. Accord’s current offerings include two-year fixed rates from 5.06% and five-year rates from 4.74% (both at 75% LTV with a £1,995 fee), but these rates are expected to rise from tomorrow.

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According to Nick Mendes at broker John Charcol, HSBC’s move positions Nationwide Building Society and NatWest at the forefront with their rates for purchase and remortgage deals for new borrowers. NatWest has also increased product switcher rates for existing customers. These developments are likely to put pressure on their service levels, potentially prompting these lenders to also increase rates in the coming days.

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