A mortgage rate hike announced on NewBuy homes - now that didn't take long.
A very quiet mortgage rate hike has been introduced by the mortgage providers signed up to the Government's NewBuy scheme. Just 43 days after the flagship housing scheme was launched to help first-time property buyers, rates have started to increase.
NatWest, Nationwide and Woolwich have all brought in a NewBuy mortgage rate hike increasing their mortgage rates.
The NewBuy scheme was set up to help buyers climb onto the property ladder with a 5 per cent deposit. However some critics claim the scheme to be already failing because buyers are unable to afford the mortgages offered.
NatWest initially came forward with the best rate of 4.29 per cent fixed for 2 years and 4.99 per cent fixed for 5 years. The lender's new 2 year fixed rate is now less attractive at 4.79 per cent and its 5 year fixed deal is 5.49 per cent.
The Woolwich has also chosen to raise its rates for a NewBuy mortgage from 4.99 per cent for a 2 year fix to 6.09 per cent for a 3 year fix and Nationwide has pushed up its rates by 0.2 per cent for its 2 year fixed deal and 0.1 per cent for its 5 year fixed deals.
Mike Farley who is the chief executive of Persimmon who are one of the housebuilders signed up to the scheme, commented saying the NewBuy concept remains sound but lower mortgage rates are needed to make it work. He added that rates around 6 per cent mean first time buyers will struggle to afford the mortgage repayments.
If you are affected by a mortgage rate hike then contact Deal Direct for an up to date mortgage comparison, we can help you find a better deal.
