Nationwide Building Society and Virgin Money have announced increases to their mortgage rates, adding an average of £360 per year to borrowers' costs. The changes, effective this week, affect both new and existing customers on selected fixed-rate deals.
Nationwide's rate rise applies to its range of two- and five-year fixed-rate mortgages, with increases of up to 0.25 percentage points. For a typical £200,000 loan, this translates to an extra £30 per month, or £360 annually. Virgin Money has similarly raised rates on its fixed-rate products, with comparable increases.
The moves follow a period of relative stability in the mortgage market, but lenders are now adjusting to higher swap rates—the cost of funding fixed-rate mortgages—amid expectations that the Bank of England may hold interest rates higher for longer. Analysts suggest further rate rises from other lenders are likely in the coming weeks.
Borrowers currently on variable or tracker rates are also affected, as these products are directly linked to the Bank of England base rate, which remains at 5.25%. Those coming to the end of fixed-rate deals face significantly higher costs compared to two years ago.
Mortgage brokers advise homeowners to review their options promptly, as rates can change quickly. Some lenders are still offering competitive deals, but the window to secure them is narrowing.
