Fixed Rate Paradox: Why Some Mortgage Rates Are Rising Despite BoE Outlook
We’ve noticed some head-scratching from our clients lately. “Hold on,” they’re saying, “wasn’t everyone talking about interest rates coming down?” It’s a fair question, especially when you’re seeing headlines about several major lenders hiking their fixed rates.
Let’s break down what’s actually happening in the mortgage market right now.
The Plot Twist
In an unexpected move, several major lenders including HSBC, TSB, and Virgin Money have recently increased their fixed rates. We’re looking at jumps of up to 0.29% on residential mortgages and 0.31% for buy-to-let properties. Currently, the most competitive rate we’re seeing for a 75% loan-to-value mortgage sits at 4.09%.
But don’t panic! This isn’t quite the story it appears to be.
Behind the Scenes
Here’s something interesting we’ve spotted at Dwello: many lenders are deliberately (and temporarily) inflating their rates. Why? It’s actually about managing their service levels rather than reflecting true market conditions.
Think of it like a popular restaurant temporarily raising prices during peak hours. It’s not because their costs have gone up – they’re simply managing the queue to ensure everyone gets proper service.
What This Means for You
If you’re currently house hunting or thinking about remortgaging, here’s our take:
- These rate increases are likely temporary
- We’re expecting to see swift reductions in the coming weeks
- The underlying market conditions remain positive
- Current best-in-market rates are still significantly better than last year
The Dwello View
Our analysis suggests this is a short-term blip rather than a long-term trend. We’re already seeing signs that this is purely about managing service levels, and we expect more competitive rates to return once lenders have cleared their current pipeline of applications.
Let’s Capitalise Together
Whether you’re ready to move now or planning ahead, there’s no need to let these temporary rate fluctuations derail your property plans. Our advisers are keeping a daily watch on rate movements and lender strategies, ready to help you unlock your Yes! moment at exactly the right time.
Important Information:
Your home may be repossessed if you do not keep up repayments on your mortgage.
The information contained in this article does not constitute financial or mortgage advice from Dwello Mortgages. It is provided for general informational and educational purposes only. No information contained constitutes a solicitation, recommendation, endorsement or offer by Dwello.
Dwello is not making any representations or warranties, and assumes no liability, for the content provided in this article, including any third party information. Consumers should always consult their own financial advisors before making any mortgage or remortgage decisions based on this type of general market commentary and analysis.
All mortgage pricing, rate scenarios and cost comparisons used are hypothetical examples. Actual rates, fees and mortgage costs may vary based on the specific lender and the individual borrower’s personal financial circumstances.
Dwello Mortgages, a trading style of Dwello Mortgages Limited is an appointed representative of HL Partnership Limited which is authorised and regulated by the Financial Conduct Authority. Dwello Mortgages Limited is registered in England and Wales with company number 14432864. Registered Office: St James House, Hollinswood Road, Telford TF2 9TW
