Lenders who launched cheap fixed-rate mortgage deals below 4 per cent interest this month, are now raising those rates, or pulling them from the market altogether.
Less than 48 hours after Platform launched its headline-grabbing 3.75 per cent five-year fixed mortgage rate this Monday, the lender removed it from the market.
It has also withdrawn products on two-year, three-year, and ten-year fixes, saying that high volumes of business were impacting its service.
Down… then up? Mortgage rates had been steadily falling since January but swap rates are now pushing some back up
Virgin Money has also pushed up its fixed mortgage range for both purchase loans and remortgaging. For property purchases rates have risen by up to 0.2 per cent, and for remortgaging by up to 0.26 per cent.
In the first week of February the lender launched a five-year fixed remortgage deal at 3.95 per cent, which at the time was the cheapest on the market. It undercut HSBC which brought out a 3.99 per cent deal.
Nicholas Mendes, mortgage technical manager at John Charcol, said: ‘Despite lenders breaking the 4 per cent barrier in recent weeks, any sort of momentum of other lenders following the pack looks to have been short-lived.
‘In the last two days swap rates have increased meaning deals that had been on the market have quickly been withdrawn.’
Up again: After falling gradually since January swap rates are now climbing again and will impact fixed rate mortgages
Swap rates are an agreement between banks where they exchange a stream of future fixed interest payments for another stream of variable ones, based on a set price.
They tend to show where the markets think mortgage rates are headed in the longer term and are factored in to home loan prices.
At the end of December 2021, the five-year swap rate was 1.10 per cent, it is now at 3.84 per cent, and is expected to continue rising.
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