How often are banks increasing interest rates on mortgages?

Jimeji

Have a 2-year fixed at 1.34% with NatWest, due to end December 31st. The portal is now offering me new mortgage deals.

5 year fixed at 3.09% which would seem a sensible option in today's environment (albeit with an additional GBP250 monthly payment). A couple of questions regarding this:

1) How often do banks increase the interest rates on their mortgage products? Is it every 6 weeks in-line with the BOE increasing rates? 

2) If I complete the switch now online, does the new rate kick in immediately or from Jan 1st when existing deal completes?

With rates seemingly only increasing, and talk of a 0.75 hike in the next BOE meet, it would seem sensible to lock in the 3.09% as soon as I can.

JJG1984

I have just done the same with natwest. From 1.71% 2 year to 3.09% 5 year. The increased payments start in December 

Jimeji

Did you do it all online, without the help of a mortgage advisor? 

Feel a bit uneasy proceeding without advice, but then it seems very straightforward and a good deal.

tafelmoneysaver

I was offered the same rate with Natwest through their renewal portal but a broker can access a Natwest 2.99% 5 year fix, so worth checking out to weigh up all your options

Edit: corrected mistyped rate

Jimeji

2.09%? Seems incredibly low in today's market. 

tafelmoneysaver

Yes, should have been 2.99% !  Edited and corrected

K_S

Jimeji said:

Have a 2-year fixed at 1.34% with NatWest, due to end December 31st. The portal is now offering me new mortgage deals.

5 year fixed at 3.09% which would seem a sensible option in today's environment (albeit with an additional GBP250 monthly payment). A couple of questions regarding this:

1) How often do banks increase the interest rates on their mortgage products? Is it every 6 weeks in-line with the BOE increasing rates? 

2) If I complete the switch now online, does the new rate kick in immediately or from Jan 1st when existing deal completes?

With rates seemingly only increasing, and talk of a 0.75 hike in the next BOE meet, it would seem sensible to lock in the 3.09% as soon as I can.

@jimeji

1. There's no one answer, but generally speaking, in recent months, most mainstream lenders have been updating rates every 2-4 weeks.

2. With NatWest, afaik the completion on the PT will only take place when the existing fixed rate expires, or ASAP where the existing rate has already expired.

london21

Jimeji said:

Did you do it all online, without the help of a mortgage advisor? 

Feel a bit uneasy proceeding without advice, but then it seems very straightforward and a good deal.

Getting appointment with Natwest mortgage advisor taking weeks at present. 

kingstreet

K_S said:

Jimeji said:

Have a 2-year fixed at 1.34% with NatWest, due to end December 31st. The portal is now offering me new mortgage deals.

5 year fixed at 3.09% which would seem a sensible option in today's environment (albeit with an additional GBP250 monthly payment). A couple of questions regarding this:

1) How often do banks increase the interest rates on their mortgage products? Is it every 6 weeks in-line with the BOE increasing rates? 

2) If I complete the switch now online, does the new rate kick in immediately or from Jan 1st when existing deal completes?

With rates seemingly only increasing, and talk of a 0.75 hike in the next BOE meet, it would seem sensible to lock in the 3.09% as soon as I can.

@jimeji

1. There's no one answer, but generally speaking, in recent months, most mainstream lenders have been updating rates every 2-4 weeks.

2. With NatWest, afaik the completion on the PT will only take place when the existing fixed rate expires, or ASAP where the existing rate has already expired.

It just feels like every other day!

fergie_

The banks can pull mortgages at any time and a lot look more at the swap rates rather than what the BoE interest rates actually are. This means they take into account future rate rises (which are often baked in), but care more about what it costs them to borrow / finance your loan on the markets.

Some observations from looking at rates today:

1) There is a big jump comparing 15% to 10% deposit. The difference above 15% deposit seemed negligible. This suggests to me that banks do not expect much of a housing market correction, if any at all.

2) The spread between 2,5 and 10y fixes is still very tight.

3) Trackers are much cheaper and definitely tempting if planning to downsize etc as most have no early redemption penalties - though rates can go up as well as down.

Jimeji

fergie_ said:

The banks can pull mortgages at any time and a lot look more at the swap rates rather than what the BoE interest rates actually are. This means they take into account future rate rises (which are often baked in), but care more about what it costs them to borrow / finance your loan on the markets.

Some observations from looking at rates today:

1) There is a big jump comparing 15% to 10% deposit. The difference above 15% deposit seemed negligible. This suggests to me that banks do not expect much of a housing market correction, if any at all.

2) The spread between 2,5 and 10y fixes is still very tight.

3) Trackers are much cheaper and definitely tempting if planning to downsize etc as most have no early redemption penalties - though rates can go up as well as down.

Thanks Fergie. Not planning on downsizing, or moving anytime soon, so don't think a tracker is right for us.