Banks pull cheapest mortgage deals off market as interest rates set to rise

Asia's Tech News Daily

© PA Wire Interest rates and unemployment

BANKS are poised to pull their cheapest mortgage deals off the market as interest rates rise, sending the cost of home loans sharply upwards.

The City now expects the Bank of Englandto raise rates from historic lows of 0.1% either next month or the month after, with base rates expected to hit 1% by August.

Analysis for the Evening Standard shows that would increase the annual cost of the nation’s mortgages by a total of £14 billion, money sucked out of the economy in the midst of a likely slowdown caused by Covid and supply chain crises.

While two-thirds of the UK’s £1.6 trillion of mortgages are on fixed rates, meaning those borrowers won’t immediately be affected, those on variable deals or trackers will be hit straight away.

Laura Suter, head of personal finance at AJ Bell, said: “Mortgages rates have been at rock-bottom lows for a long time and many homeowners have never known an environment of higher interest rates, so any rise will be a nasty shock for them. And be warned, mortgage providers don’t hang around when it comes to passing on rate rises, so anyone on a tracker deal will see their costs go up immediately. If 0.5 percentage points is added to mortgage interest it adds about £50 a month to the cost of a £200,000, 25-year mortgage, or around £120 a month extra to a £450,000, 25-year mortgage.”

At the weekend Bank of England governor Andrew Bailey dropped the heaviest hint yet that interest rates will have to rise to counter inflation. Behind closed doors, banks are moving quickly.

Barclays has already adjusted some fixed rate deals. Nationwide Building Society and Lloyds, the biggest lender, did not immediately respond to requests for comment.

The City is pricing in rate rises as now inevitable.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Underlying Swap rates have risen sharply in the past couple of weeks with five-year Swaps now over 1 per cent. This cost will have to be passed on to the borrower and we expect to see five-year fixed rates rise accordingly. Indeed, Barclays is increasing its five-year fix at 75 per cent LTV from today from 1.21% to 1.31%. Barclays is also raising its two-year fix at 60 per cent LTV from 0.86 to 0.91 per cent.”

Elliot Nathan of top mortgage broker John Charcol said: “Banks are going to start increasing their fixed rates once we see Bank of England put up the base rate coupled with the rising rate of inflation. Once we start to see the first-rate rise, the banks will follow suit and we may not see interest rates as low as these again. For any borrowers on a variable rate, now is the time to secure a fixed rate to ensure the cost of your mortgage does not increase over the next few years”.

Assuming a mortgage of £250,000 over 25 years, a jump in rates to 1% would cost an extra £100 a month.

There are £1.6 trillion in outstanding home loans across 13.3 million mortgage accounts, making the average mortgage about £120,000. In London, that figure is plainly much higher.

British households will be £1,000 worse off next year from a cost of living squeeze created by rising energy prices and shortages of workers according to one study.

The Resolution Foundation said higher inflation would hit workers’ earnings next year, contributing to a hit to the average household income.

Barclays said: “We constantly review our product offering and make changes – where necessary – to ensure we continue to deliver a high level of service to mortgage brokers and their clients. As a result of a recent review, some products across our Residential and Buy to Let ranges have seen price changes.”

Top City bank analyst Ian Gordon of Investec said: “Mortgage rates will absolutely rise from here. The energy crisis will add to inflationary pressures and exacerbate the squeeze of household disposable incomes, this simply increases the upside pressure on mortgage rates, adding to the household pain.”

Register now for one of the Evening Standard’s newsletters. From a daily news briefing to Homes & Property insights, plus lifestyle, going out, offers and more. For the best stories in your inbox, click here.

Internet Explorer Channel Network
Asia's Tech News Daily
News Related

OTHER NEWS

Closest pair of supermassive black holes are spotted just 1,600 light years apart in the sky - and are spiralling toward a cataclysmic collision, scientists say

Closest pair of supermassive black holes to Earth ever seen have been observedScientists said the two objects were about 89 million light-years away from EarthThey are 1,600 light-years apart and will eventually merge into a giant black holeThe European Southern Observatory's Very Large Telescope helped detect them Read more »

Matildas soccer player Sam Kerr embraces American girlfriend Kristie Mewis as their teams compete during match in Newcastle

Samantha Kerr and her U.S. soccer star girlfriend Kristie Mewis faced off in a soccer match on Tuesday.  The Matildas player, 28, and her Houston Dash star partner, 30, embraced at ... Read more »

Awesome Pawsome: Here is why you should bring a Chihuahua home

Those shining bright eyes that are attractive enough to make you fall in love at the very moment you make eye contact. A cute voice that sounds like a piano ... Read more »

Jurgen Klopp admits he is baffled by the Ballon d'Or and says it's 'tricky' for any player to beat Lionel Messi to the top prize after Robert Lewandowski missed out... as he insists Mo Salah deserved to be higher than seventh place

Jurgen Klopp gave his opinions on the Ballon d'Or results on Tuesday afternoon The Liverpool boss felt his forward Mohamed Salah should have finished higher The German also expressed dismay that Robert Lewandowski did not win award Klopp managed the Bayern striker while the pair were at Borussia Dortmund READ: Lionel Messi leads calls for retrospective 2020 award for Lewandowski  Read more »

'Investing should be as normal as having a bank account': As Freetrade expands into Europe, we ask its co-founder if it can sustain momentum and be top dog?

© Provided by This Is Money MailOnline logo Viktor Nebehaj’s first encounter with Freetrade came via a Crowdcube funding campaign. In a bold move, he emptied his bank accounts to ... Read more »

The tantalizing Rangers addition that means losing Ryan Strome in the long haul

USA TODAY Sports Sign up here to get Inside the Rangers delivered to your inbox each Tuesday morning. Approaching the 2020 trade deadline, the Rangers and their executive team of president ... Read more »

Mohamed Salah, Bruno Fernandes and seven more stars fighting for Fans' Footballer of the Year

It is that time of year again where we ask the fans to vote for their Reach PLC Fans’ Footballer of the Year award from the shortlist selected by our ... Read more »

Omicron latest: At least 17 countries, territories record cases of new variant

A police officer gets a booster vaccination against COVID-19 in Germany, as cases of the Omicron variant continue to rise. © Moritz Frankenberg/dpa via ZUMA Press At least 17 countries ... Read more »

'I think they are being hampered' - Finance expert drops FFP claim about Fosun & Wolves

Football finance expert Kieran Maguire has been discussing Wolves and the current financial situation at Molineux. © Provided by This is Futbol Molineux Wolves certainly made an impact during their ... Read more »

Key dates in 2022: Super League, Challenge Cup, Championship, League 1, World Cup

The 2022 season has the potential to be one of the best in recent memory with plenty for fans to get their teeth into. Stretching from January to November, there ... Read more »

Omicron variant: Don't socialise unless necessary, urges Dr Jenny Harries - but govt disagrees

Government advice on limiting social contact and working from home has not changed, Downing St says, despite Dr Jenny Harries warning the public that people should not socialise “when we ... Read more »

Voices: If we are serious about tackling the migrant crisis, we must follow Germany's example

Compassion for desperate refugees. Panic over porous borders. These conflicting emotions have both been on display in the last week. Most reasonable people will admit to feeling an element of ... Read more »

Vieira must unleash Palace's £79k-p/w “special talent” vs Leeds, he's a game-changer - opinion

© Provided by Football FanCast Crystal Palace striker Odsonne Edouard Crystal Palace will be aiming to bounce back from just their third Premier League defeat of the season when they ... Read more »

Dow futures drop 300 points amid Omicron COVID concerns

Futures tied to the Dow Jones Industrial Average fell as much as 500 points at one point. Brendan McDermid/REUTERS Global stock markets were reeling once again Tuesday morning due to ... Read more »

Man, 40, in court charged with murder after mum-of-two Alexandra Morgan, 34, vanished without trace over 2 weeks ago

A MAN has appeared in the dock charged with the murder of a mum-of-two who vanished without trace more than a fortnight ago. Alexandra Morgan, 34, was last seen at ... Read more »

S Club 7's Paul Cattermole launches new career as tarot card reader

S CLUB 7'S Paul Cattermole has launched a new career as a tarot card reader – 18 years after the group disbanded. The 44-year-old star has had a rocky road ... Read more »

Tipping Point viewers seriously distracted by ‘stunning' contestant – but the praise doesn't last long

TIPPING Point viewers were left seriously distracted by a 'stunning' contestant – but the praise didn't last long. Monday's edition of the ITV quiz show saw four new players take ... Read more »

I'm A Celeb's Ant McPartlin hints the show could be forced off air AGAIN as he says ‘more bad weather' will blast castle

I'M A Celebrity host Ant McPartlin has warned more bad weather is threatening the series. The 46-year-old star, who has been off screens for days after the series crashed off ... Read more »

How to get the BMW 3.0 CSL Race Car in Hot Wheels Unleashed

© Provided by GamePur The BMW 3.0 CSL Race Car is an easily recognizable Hot Wheels car, though you may only know it for the brand that’s plastered along the ... Read more »

Cebu Pacific releases flexible options for passengers until Dec. 7

Cebu Pacific Amid the threat of the Omicron coronavirus variant, budget carrier Cebu Pacific said the Inter-Agency Task Force released guidelines for arriving passengers effective November 29, 2021. In a ... Read more »

How to fix Error 2002 in Final Fantasy XIV?

© Provided by Dot Esports Final Fantasy XIV is entering its busiest days with the release of the upcoming expansion Endwalker, and it’s going to bring a massive amount of ... Read more »

Ghislaine Maxwell: trial to enter second day with Epstein's pilot testifying

Photograph: Carlo Allegri/Reuters Ghislaine Maxwell’s child sex-trafficking trial enters its second day of testimony on Tuesday, with the longtime pilot of her alleged accomplice, the late financier Jeffrey Epstein, returning ... Read more »

Chad pardons members of armed groups ahead of national dialogue

By Mahamat Ramadane N'DJAMENA (Reuters) – Chad's ruling military council has granted a general amnesty to members of armed groups as one of its steps towards a proposed national dialogue, ... Read more »

Staff at magazine publisher Future to share in £10m bonus pot

Photograph: Patti McConville/Alamy Shares in owner of Marie Claire, Techradar and GoCompare rose by 15% after forecast of higher profits Staff at Future, the owner of magazines from Marie Claire ... Read more »

Teen boy facing charges after Erie police said he led officer on pursuit, crashed stolen auto

A 14-year-old boy is facing criminal charges after Erie police said he led officers on a pursuit on Monday that ended when he crashed a stolen vehicle into the porch ... Read more »

Nov auto sales: Tata Motors likely to emerge winner; CVs in spotlight

NEW DELHI: Tata Motors , along with other commercial vehicle (CV) players, are likely to steal the limelight as the monthly sales data for November starts pouring in from Wednesday ... Read more »

Thrilling trailer for '83' introduces Ranveer Singh as cricketer Kapil Dev

© Provided by The National Ranveer Singh as former Indian cricket captain Kapil Dev in the Bollywood film ’83’. Photo: Reliance Entertainment Nothing whips up a frenzy in India quite ... Read more »

Munster rugby players and staff allowed to fly home from South Africa

Munster coach Johann van Graan (Niall Carson/PA) (PA Archive) Plans are under way to bring the majority of the Munster rugby team back to Ireland the Sports Minister has said. ... Read more »

Die alten Helden reiben sich die Augen: FCZ träumt von Meister-Zeiten

Der FCZ thront auf Rang 1. Ob das auch am Saisonende noch so sein wird? Das sagen fünf Klub-Legenden zu den Zürcher Meister-Chancen. © Valeriano Di Domenico 23.05.2016; Zuerich; Fussball ... Read more »

West Side Story star Rita Moreno pays tribute to Stephen Sondheim

© Bang Showbiz Rita Moreno pays tribute to Stephen Sondheim Rita Moreno has paid tribute to ‘West Side Story’ composer Stephen Sondheim, who died on Friday (26.11.2021) at the age ... Read more »

Mathew Horne to star in new comedy series Newark, Newark

© Bang Showbiz Mathew Horne is to star in a new comedy series, Newark, Newark Mathew Horne and Morgana Robinson are to star in new Gold comedy ‘Newark, Newark’. The ... Read more »

Eco-age founder Livia Firth: 'We need to destroy fast fashion'

© Provided by The National Livia Firth is the co-founder and creative director of Eco-Age, a consulting and creative agency specialising in sustainable business strategies. Photo: Will Whipple Livia Firth ... Read more »

A single soccer team is responsible for every case of the Omicron COVID variant in Portugal

© Gualter Fatia/Getty Images The club said 44 players and staff were now self-isolating. Gualter Fatia/Getty Images 13 people in Portugal have tested positive for the Omicron variant of COVID-19. ... Read more »

Anne Hegerty reflects on 'pathetic' I'm A Celebrity stint

© Bang Showbiz Anne Hegerty reflected on her time in I’m A Celebrity in 2018 Anne Hegerty thought she was “pathetic” during her time on ‘I’m A Celebrity… Get Me ... Read more »

Strictly's John Whaite eager to win Glitterball Trophy after mum smashed Bake Off prize

© Bang Showbiz John Whaite is eager to win Strictly’s Glitterball Trophy with Johannes Radebe Strictly Come Dancing’s John Whaite is keen to win the Glitterball Trophy after his mum ... Read more »

Heathrow and Gatwick: The 10 countries on the red list and those most at risk of being added to it

As the new variant of coronavirus Omicron appears to be spreading fast, the UK government has reimposed certain Covid restrictions – particularly on travelling abroad. B.1.1.529, the new strain, could ... Read more »

8 lakes and mountain holidays to feel at one with nature

The UK and Europe are packed with towering peaks and sparkling lakes that allow you to get closer to nature on a lakes and mountain holiday. © Slovenia. Jeremy Woodhouse ... Read more »

Whopping £14million EuroMillions jackpot could be yours TONIGHT… and there's more to win this week

A LUCKY Brit could be could richer to the tune of £14million tonight in the latest EuroMillions jackpot. If players don’t scoop the massive EuroMillions haul tonight there are also ... Read more »

Video: 'I'm on the right medication thanks to no doctor or conservatorship people!' Britney Spears gives a health update after legal battle and reveals she 'gets high' from fasting for up to FOUR DAYS

Read more »

Video: 'They've been sleeping on the floor!': I'm A Celeb's Ant and Dec discuss how stars coped with being removed from the castle due to Storm Arwen - as line-up RETURNS to camp before show airs on Tuesday

Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic