Barclays and NatWest customers facing immediate extra costs after changes made

Barclays and NatWest customers facing immediate extra costs after changes made Experts have said it's not a good picture Barclays and NatWest customers are facing extra costs in what experts have called a 'dark week'. All of the UK’s 'big six' mortgage lenders have now hiked rates following days of volatility in the swap markets, with brokers warning the increases may not be over. Barclays and NatWest have now repriced, confirming increases across a selection of residential purchase products from Wednesday and Thursday respectively. Barclays' 4.55% two-year fixed rate, available to borrowers with a 40% deposit and an £899 fee, will rise to 4.75%. The move follows a wave of increases from other major lenders, with some repricing two or three times in the space of a week. Higher swap rates, which are used by lenders to price fixed-rate mortgages, have put pressure on funding costs amid volatility in financial markets. Brokers described it as a “dark week for borrowers” and warned people approaching the end of fixed deals not to wait for the market to settle. Aaron Strutt, product and communications director at London-based Trinity Financial, said Barclays’ move had been widely expected after the other major lenders raised rates. He added: "These Barclays rate changes were widely expected seeing as all of the other major lenders raised their rates earlier this week. Barclays market leading 4.55% two-year fix with an £899 fee and 40% deposit requirement will increase to 4.75%. "It looks like the bank has raised lots of its rates so they are now over 5%, which is something we were hoping would not happen despite all the economic tensions. It is unusual for so many lenders to hike their rates so quickly, which highlights how challenging mortgage funding conditions are at the moment. "Santander's rate rises of up to 0.45% were among the largest so far, but for the moment we still have lenders offering two-year fixes priced around 4.75%. It seems like Barclays is not pulling its 3.99% two-year tracker which is a standout best buy at the moment. More borrowers are going to be looking at tracker rates because they are so much cheaper than the fixes." Rohit Kohli, director of Romsey-based The Mortgage Stop, said every one of the Big Six had now increased rates. He added: "It's been a dark week for borrowers. Every one of the Big Six has now hiked, and some of those increases are big ones. Thursday's Bank of England decision will be tight. I expect a hold, because the data isn't forcing a rise yet. But don't mistake that for light at the end of the tunnel. "The inflation pressure is coming. With oil and energy costs where they are, I'd be surprised not to see a rate rise by the end of the year, or early in the new year at the latest. Politicians need to get a grip. The bulk of this is down to one man, and global leaders need to work out how to stand up to him. Until they do, world events will keep feeding straight into UK inflation, mortgages will keep getting less affordable, and the market could grind to a halt." Ross Lacey, director and Independent Financial Adviser at Rayleigh-based Fairview Financial Management, said fixed-rate increases were now happening across much of the market. He added: "Fixed-rate rises are happening across the board with most lenders. Our advice to anyone coming up to six months before their current fixed rate deal ending is to speak with a broker and get something locked in as soon as possible. That way they can protect themselves from future rate rises, but can also cancel and rebook a better deal if it comes up in the next six months." Samuel Mather-Holgate, managing director and IFA at Swindon-based Mather and Murray Financial, said mortgage “warning bells” were ringing again as lenders reacted rapidly to changes in swap rates. He added: "Mortgage warning bells are ringing again. Major lenders are moving fast, with Barclays confirming rate increases across selected residential purchase products after renewed swap rate volatility. When swap rates jump, mortgage pricing can change almost overnight – and borrowers are now seeing that in real time. "With global debt concerns, inflation pressure and nervous markets all feeding into the picture, the mortgage market is entering another tense period. Does this mean a housing crash is guaranteed? No. But pressure on affordability is real, and sudden rate rises can quickly change what buyers and homeowners can afford. The message is clear: mortgage rates are moving, lenders are reacting, and anyone buying, remortgaging or nearing the end of a fixed rate should review their options early and get proper mortgage advice." Dariusz Karpowicz, director of Doncaster-based Albion Financial Advice, said the rapid succession of increases among the major lenders was a clear signal from funding markets. He added: "Swaps have been driven by war, oil, and broader jitters, and Barclays’ move from its 4.55% two-year fix to 4.75% reflects the pressure. The Bank of England decision on Thursday may not halt the current trend. If you are purchasing, or your deal expires in the next six months, lock in a rate now. Most lenders allow a remortgage offer to be held for as long as six months; if prices drop, you can move to the cheaper product, and if they climb, you are already covered. Delaying is a gamble, and at the moment you do not need to take it." Craig Fish, director of London-based Lodestone Mortgages, said the fact that all six major lenders had moved in the same direction showed this was a wider market repricing rather than an isolated lender decision. He added: " Black Friday has come early, except this time borrowers are rushing to lock in before prices go up, not down. Barclays raising rates on a chunk of its purchase range, alongside the rest of the Big Six repricing on the back of swap rate volatility, tells you everything about where this market is heading. "This isn't a one-lender blip. When six major lenders move in the same direction at the same time, that's the market repricing risk across the board, not reacting to one bank's internal numbers. "If you've got a rate in your sights, or a deal expiring in the next few months, today is not the day to sit and wait for a better offer. The direction of travel is up, and the lenders leading the market have just confirmed it." Andrew Montlake, CEO at London-based Coreco, said the simultaneous moves by the Big Six reflected a “pretty brutal” period of volatility in financial markets. He added: "When all of the Big Six are moving rates upwards, this is no longer the odd lender tweaking its pricing; it is a clear reaction to what has been a pretty brutal spell of volatility in the money markets. Mortgage rates do not move simply because the Bank of England's base rate changes. "Swap rates, gilt yields, inflation expectations and global events all feed into lenders’ cost of funding, and those costs have risen sharply. There is still strong appetite to lend, so this is not lenders shutting up shop, but pricing has become much more difficult. "Borrowers should not panic, but anyone approaching the end of a fixed rate should start looking sooner rather than later. The cheapest deal today is no use if you wait for tomorrow and discover it has disappeared."