Major lender raises mortgage rates amid gloomier rate outlook and Budget uncertainty

A major high‑street lender has raised its mortgage rates, citing a gloomier outlook for interest rates and uncertainty around the upcoming Budget, a move that will push up borrowing costs for homeowners and buy‑to‑let landlords.

The rise is the latest in a string of increases from banks and building societies as lenders price in a higher and more prolonged period of Bank of England base rates. Borrowers whose fixed‑rate deals are expiring, those in the process of buying a home and landlords with interest‑only buy‑to‑let loans face the most immediate impact.

Mortgage industry advisers and consumer outlets say borrowers should act as soon as possible to limit the effect of further rate moves. Homeowners can often lock in a new deal six to nine months in advance with many lenders, frequently without obligation to complete on the product, and some deals allow arrangement fees to be added to the loan so the fee is only taken if the mortgage proceeds.

Adding fees to the loan can reduce upfront costs but increases the overall amount of interest paid over the mortgage term, a trade‑off that may not suit all households. Brokers also highlight that buyers with agreed offers should secure rates early to know what monthly payments will be and to avoid overstretching budgets amid the prospect of weaker housing demand and lower prices if borrowing capacity tightens.

Buy‑to‑let landlords are likely to see sharper rises in monthly payments where mortgages are on an interest‑only basis because any increase in the rate flows straight to the monthly payment. Industry advisers say remortgaging well in advance is particularly important for landlords to avoid sudden payment shocks.

Comparing deals and seeking professional advice are being recommended as the most practical steps for borrowers. Consumer finance sites reference fee‑free mortgage brokers that search large panels of lenders and tools that compare rates tailored to home value, mortgage size, term and fixed‑rate needs. One broker referenced in consumer guidance, London & Country Mortgages (L&C), is authorised and regulated by the Financial Conduct Authority (FCA), registration number 143002. The FCA does not regulate most buy‑to‑let mortgages.

Market participants said rates can change quickly and that shoppers should not assume the current snapshot will last. Mortgage products quoted today may not be available tomorrow, and the choice of fixed versus variable, the size of any fees and whether fees are added to the loan are all factors that affect the total cost of borrowing.

Lenders have been adjusting pricing in response to a reassessment of the Bank of England’s path for interest rates and to reflect risks around fiscal policy as the Government prepares for its Budget. Analysts have noted that a higher‑for‑longer outlook for rates increases uncertainty for households and could weigh on housing market activity.

The increase from the lender adds to evidence that borrowers will face a prolonged period of tighter mortgage conditions, with potential consequences for affordability and the housing market. Those considering remortgaging, purchasing a home or refinancing a buy‑to‑let loan are being urged to compare available deals, consult a qualified broker where appropriate and consider securing a rate sooner rather than later.

Borrowers should note that mortgage services and tools vary by provider, and regulatory protections differ between residential and buy‑to‑let products. Failure to keep up mortgage repayments could result in repossession of a home or property.