Another major bank is increasing interest rates on its fixed mortgage deals.
From tomorrow, Barclays is increasing rates by 0.2 percentage points across the bulk of its fixed deals aimed at home buyers and those remortgaging.
At the same time, it is reducing some of its buy-to-let rates by 0.45 percentage points for existing borrowers.
This move by Barclays follows hot on the heels of Santander, HSBC, TSB and Leeds Building Society, which all announced they were increasing costs on their home loan deals last week.
The rise in mortgage rates is largely due to Sonia swap rates, which have been rising in recent weeks.
Sonia swap rates, the rates at which banks trade streams of interest payments with each other to mitigate risk, reflect lenders’ expectations of future interest rates and play a critical role in how fixed-rate mortgages are priced.
More expensive: Barclays has just announced an 0.2 percentage point increase across the bulk of its residential purchase and remortgage fixed deals
Speaking to the news agency, Newspage, Justin Moy, managing director at broker EHF Mortgages said the Government should intervene to bring costs down for borrowers.
‘Barclays is one of the last lenders to increase rates in light of recent swap rate trends, which aligns them with many of their high-street peers,’ he said.
‘The Government needs to intervene to bring the cost of borrowing down before we head into a messy recession in the months to come.’
What mortgage rates is Barclays changing?
Barclays’ cheapest two-year fix for people buying with at least a 40 per cent deposit will go from 4.23 per cent to 4.43 per cent. The deal comes with a £899 product fee.
On a £200,000 mortgage being repaid over 25 years, that’s the difference between paying £1,081 a month and £1,104 a month.
The lowest two-year fixed remortgage rate with Barclays is rising to 4.47 per cent, with a £999 fee.
Those buying with a 25 per cent deposit will see Barclays’ lowest two-year fix go from 4.36 per cent to 4.56 per cent. Again this comes with an £899 fee.
Someone buying with a 10 per cent deposit will see the cheapest possible two-year fix with Barclays rise from 5.19 per cent to 5.39 per cent.
The lowest five-year fix for someone buying with at least a 40 per cent deposit will rise from 4.11 per cent to 4.31 per cent.
Those with a 10 per cent deposit will see the lowest Barclays deal go from 4.81 per cent to 5.01 per cent.
On a £200,000 mortgage being repaid over 25 years that’s the difference between paying £1,147 and £1,171 a month.
The lowest two-year fix on the market is currently offered by Nationwide charging 4.22 per cent with a £999 fee and the lowest five-year fix continues to be offered by NatWest charging 4.07 per cent with a £1,495 fee.