Lenders holding back from increases to best mortgage rates.
Some lenders are holding back from increases to their best mortgage rates, despite the rising trend for rate increases among many high street banks and building societies.
ING Direct have increased the cost of its mortgage products by 0.5 per cent across the board and have imposed fees on a number of previously fee-free fixed rate mortgage deals. The cost of an ING 2 year fixed rate mortgage has risen from 3.49 per cent with no fee, to 3.99 per cent with a £945 fee.
However, not all best mortgage rates are rising. Fixed rates have generally remained low, with some lenders cutting rates further. The Chelsea Building Society have reduced the cost of its 5 year fixed rate mortgage by 0.10 per cent to 3.29 per cent and First Direct still offer their 5 year fixed rate mortgage at 3.28 per cent. If the Bank of England base rate remains at 0.5 per cent for the next 2 years, then Yorkshire Building Society's 5 year hybrid tracker offers a good deal for borrowers.
Ben Thompson of Legal & General Mortgage Club has said that “There has been some mention recently of mortgage rates hardening due to funding costs rising for lenders and being passed on to new borrowers, but even so, there are still some fantastic best mortgage rates available now, that are low for this market cycle, let alone by historical averages.”
