Urgent new update for Nationwide and Virgin Money customers as 'costs rise again'

Urgent new update for Nationwide and Virgin Money customers as 'costs rise again' It follows a similar move by Barclays earlier this week Nationwide and Virgin Money customers have been told they face extra costs as changes are made this week. They are the latest lenders to raise mortgage rates as brokers warn "the mortgage rollercoaster isn't quite ready to stop". Nationwide will increase selected fixed and tracker rates by up to 0.21%, while Virgin Money will raise some of its fixed rates by as much as 0.20%. The changes follow Barclays’ decision on Monday to increase its market-leading 4.75% two-year fixed mortgage to 5.05% and its 4.93% five-year fix to 5.03%. Brokers warned that sub-5% mortgages were becoming increasingly scarce and said further increases could follow while swap rates and lenders’ funding costs remained elevated. Justin Moy, managing director of Chelmsford-based EHF Mortgages, said there were few sub-5% mortgages remaining. He added: "I don't think this surprises anyone at the moment. Virgin Money and Nationwide themselves are increasing rates as swap rates and the economic climate show no sign of improvement in the short, or long, term. "With very few fixed rates sub-5% now available, this has a huge knock-on effect for buyers and those looking to remortgage. The government can create all the small deposit schemes it likes, but if rates are high, buyers will shy away, and the market stalls." Moving wrong way James Blackler, managing director of Oakstead Finance, said the reason Nationwide and Virgin had repriced was that "swap rates dictate mortgage pricing, and they're moving the wrong way for borrowers". He added: "But borrowers aren't powerless here. Every client we work with gets their remortgage lined up around six months before their existing deal ends, precisely so a move like this doesn't catch them out. "Those without that buffer are the ones ringing us in a panic a fortnight before their fixed rate expires, with pricing shifted underneath them. This latest 0.21% rise across remortgage and switcher ranges won't be the last of the year. Preparation beats panic every time, and the borrowers who protect themselves early are consistently the ones who come out ahead." Adam Stiles, managing director of London-based Helix Financial Partners, said swap rates were driving the increases. He added: "Continued rate rises are currently the norm. No lender wants to be top of the list as this hugely impacts their service levels. So we can expect the mortgage merry-go-round of rate rises until swaps, which dictate the pricing of fixed rates, calm down and reduce in volatility." More rate rises to come Tracey Dixon, buy-to-let mortgage specialist and owner of Cardiff-based Pure Mortgage and Protection, said borrowers should expect more mortgage rate rises. She added: "I wouldn’t assume this week’s increases are the last. Lenders are repricing as their funding costs rise, but rates can change quickly in either direction. Anyone nearing the end of a fixed deal should review their options early rather than wait for certainty." Elliott Benson, owner of Leeds-based Sett Mortgages, said mortgage rates change quickly. He added: "It is going to be disappointing for many buyers and movers to see this as more lenders jump on the rate increase bandwagon with not much notice at all. They've been sporadically increasing over the last week and it doesn't seem to be slowing down. However, as we have seen before, things can change overnight and then we may be looking at another race to the bottom as we have seen so many times before over the past year." Market rollercoaster David Stirling, Independent Financial Adviser at Belfast-based Mint Wealth, said it was a "rollercoaster" in the market. He added: "For borrowers hoping for some relief, news that Nationwide and Virgin Money have increased rates will feel like another kick when they're already down. Every time the market seems to be settling down, something comes along to remind homeowners that the mortgage rollercoaster isn't quite ready to stop." Michelle Lawson, director of Fareham-based Lawson Financial, said "the borrower onslaught is relentless with this latest round of rate increases". She added: "People's pockets are only extendable to a point and this isn't healthy. The middle are now being squeezed every single day with many questioning the point. "The UK economy is a disaster that nobody seems to be able to get a grip of. This must be addressed sooner rather than later as people can only do so much and the state's pot is empty."