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Mortgage Rate Hikes: What You Need to Know

Mortgage Rate Hikes: What You Need to Know

The mortgage market is experiencing significant changes with several lenders announcing rate hikes, affecting a variety of mortgage products. Halifax, one of the UK's major lenders, is increasing the cost of its two-year fixed rates for remortgage by up to 0.17 percentage points from March 15. This follows the bank's earlier rate hikes for home purchase fixed rates. Despite the increase, Halifax's two-year fixed rate for remortgage remains competitive, starting at 4.6% with a £999 fee for a 60% loan-to-value (LTV) ratio.

Additionally, Halifax will raise rates on selected product transfer deals for existing customers by 0.32 percentage points and is reducing its maximum working age criterion from 75 to 70 for some mortgage applications. Coventry Building Society is moving against the grain by reducing selected fixed rates for residential and buy-to-let purchase and remortgage from March 14.

The mortgage market's concern is further amplified by the Bank of England's latest data showing a 9.2% increase in home loan arrears in the last quarter of 2023, suggesting that rising interest rates and the cost of living crisis are pressuring homeowners. The value of outstanding mortgage balances with arrears has risen to £20.3 billion, the highest since 2016, indicating a potential personal finance crisis for many households.

Free online mortgage advisers, such as Better

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