Halifax has confirmed changes from Tuesday that will cost customers more. It is hiking mortgage rates by up to 0.20% amid rising oil prices at the end of last week, as brokers warned "you are willingly throwing money away" if customers don't lock in a deal now. Lenders continue to react to the rising oil price last week, with Halifax today announcing rate increases of up to 0.20% that will go live from Tuesday, July 28.
Rate increases across ranges
Across its homemover and first-time buyer range, there will be rate increases of up to 0.15% on selected two, three and five-year fixed rates. Across the lender's remortgage range, rate increases of up to 0.20% will apply to selected two, three- and five-year fixed rates. Meanwhile, product transfers will see hikes of up to 0.10% on selected two and five-year products.
Oil price volatility
The oil price rose to $100 at the tail end of last week, but has eased to below $90 today following the US pausing strikes. This comes just a week after Halifax had previously raised rates and HSBC and Barclays have also hiked. The Bank of England will make its decision on what to do with its base rate on Thursday – it is widely expected to hold its rate at 3.75%.
Broker warnings
Darryl Dhoffer, founder of Bedford-based The Mortgage Geezer, urged borrowers to lock in a deal now. He added: "If you are sitting on your hands waiting for mortgage rates to magically drop while crude spikes and swap markets panic, wake up. Halifax hiking rates by up to 0.20% overnight isn't a minor blip, it is a direct warning. When global energy volatility flares, lenders pass the risk straight onto borrowers, and waiting even 24 hours can cost you thousands."
"Secure a rate today. Most mortgage offers are locked for three to six months, giving you a free insurance policy against further market chaos. If rates somehow improve later, you can switch, but if you drag your feet now, you are willingly throwing money away."
Anthony McQuilliam, director of Bolt Mortgages, said rates could move overnight. He added: "Halifax's rate increases are a reminder of how quickly the mortgage market can shift – and how little warning borrowers get. Oil at $100 a barrel feeds directly into inflation expectations, and lenders reprice before the ink is dry on the headlines."
"For anyone sitting on a tracker or approaching the end of a fixed term, this is a wake-up call. Rates can move overnight. If you're within six months of your renewal date, speak to a broker now – most lenders let you lock in a rate today and switch to it at completion, with no obligation."
"The US pause on strikes may bring some relief this week, but the underlying volatility isn't going away. Borrowers who act decisively in windows like this are the ones who protect themselves. Those who wait for the market to 'settle down' often find it already moved on without them."
Further advice
Omer Mehmet, managing director of Welling-based Trinity Finance, said the oil price was feeding into mortgage rate hikes. He added: "More rate hikes were almost inevitable after the oil price shot up last week following an escalation in the Middle East. Once again, the lesson for borrowers is never take further rate cuts for granted as the mortgage market can turn in an instant."
Andrew Montlake, CEO of London-based Coreco, said rates might increase further. He added: "A deteriorating situation in the Middle East last week put markets and lenders on edge and borrowers are now feeling it in the form of higher mortgage rates. My advice to anyone considering a mortgage or remortgaging is lock in quickly, as the rates that remain available may not be around for long."
Tracey Dixon, buy-to-let mortgage specialist and owner of Cardiff-based Pure Mortgage and Protection, said lenders react quickly to world events. She added: "When markets move, mortgage rates don't wait for the Bank of England. This latest increase from Halifax is another reminder that lenders also react to movements in wholesale funding costs."
"For borrowers planning to buy or remortgage, it's a good reason to secure a suitable rate sooner rather than later. Many lenders will let you move to a lower rate before completion if pricing improves, but you can't usually go back to a deal that's already been withdrawn."
