Coventry Building Society is the latest mortgage lender to increase its interest rates for mortgage holders, informing brokers of the hike by email today.
The increase, which will come into effect from 8am on Wednesday July 5, will impact all residential and buy-to-let fixed rates.
Coventry has not yet told intermediaries the extent of the rate increases.
The increase follows on from the Bank of England’s largest hike to the base rate in June, which now sits at 5 per cent.
As per Coventry's existing commitment, the lender gave intermediaries 48 hours of the rate increase, a practice brokers have previously praised.
Speaking to FTAdviser in June, the lender’s head of intermediary relationships, Jonathan Stinton said this commitment of a notice period had been in place before he joined the firm over 15 years ago.
According to Moneyfacts, the average two-year fixed residential mortgage rates today is 6.42 per cent, up from 6.39 per cent at the end of last week.
Meanwhile, the average five-year fixed rate sits just below 6 per cent at 5.97 per cent.
On the buy-to-let front, the average two-year fix sits at 6.59 per cent today.
Today’s increase from Coventry follows on from hikes by NatWest, Barclays and Virgin Money towards the end of last week.
Last Friday, NatWest increased its residential new business deals and its existing customer switcher deals by 35 basis points.
Commenting on the pace of rate changes, Uswitch Mortgages expert, Kellie Steed said: “Rates are not currently attractive when compared to the low numbers buyers have become familiar with in recent years. However, with an average standard variable rate now breaching 8 per cent, it’s absolutely worth fixing at the lowest fixed-rate currently available to you.”
Last week, in a bid to support home owners, the government announced the creation of a mortgage charter which has been signed by over 30 lenders.
The mortgage charter’s signatories, which include HSBC, Barclays and Santander, have agreed that, starting from June 26, borrowers will not be forced to leave their home without their consent, unless in exceptional circumstances, in less than a year from their first missed payment.
In addition to this, the charter sees lenders commit to allowing borrowers who are up to date with their payments switch to interest-only payments for six months, or extend their mortgage term to reduce their monthly payments.
On top of this, the charter also sees signatories commit to allowing customers approaching the end of a fixed rate deal the chance to lock in a deal up to six months ahead, starting from July 10.
jane.matthews@ft.com
