TSB implements new rate changes across residential and BTL products
- TSB has raised rates on five-year fixed rates for first-time buyers and movers at 90% and 95% LTV from November 29.
- Other lenders, including Virgin Money and HSBC, have also adjusted their rates, reflecting a wider trend in the mortgage market.
- These changes indicate the potential for further repricing across the market due to ongoing economic conditions.
In the United Kingdom, several lenders have been adjusting mortgage rates in response to ongoing market volatility, with significant changes announced recently. TSB implemented a variety of rate changes to its residential and buy-to-let (BTL) products effective November 29. These adjustments included increases of 0.15 percentage points on five-year fixed rates for first-time buyers and movers at 90% and 95% loan-to-value (LTV) ratios. Additionally, the bank cut rates on selected two- and five-year fixed rates for those with cash deposits of at least 10%, resulting in more attractive offers for borrowers. Other lenders have also made similar adjustments in the mortgage market. For example, Virgin Money has raised rates on selected two- and five-year fixed deals at 85% and 90% LTV by up to 0.15 percentage points, effective November 22. Earlier increases were seen in mid-November, showcasing a trend where Virgin Money incrementally raised the costs of various residential mortgage products by up to 0.2 percentage points. HSBC, Barclays, and others have also risen to adjust their offerings in light of perceived market pressures and expectations related to interest rate cuts from the Bank of England. The fluctuations in the mortgage rates are influenced by a combination of market sentiment about future interest rates and broader economic indicators. Experts predict that the actions from lenders reflect a pricing in for anticipated changes to interest rates, with the markets currently expecting a 0.25 percentage points rate cut in the Bank of England's upcoming meeting. However, there is an acknowledgment that the potential for inflationary pressures, stemming from the recent Budget announcements, might compel the Bank of England to maintain its rates at elevated levels for a protracted period. Market participants are closely monitoring how these repricing actions from lenders will unfold, with the possibility of further adjustments if current conditions persist. Reports indicate that despite the volatility, there is a mixed outlook, and consumers, particularly first-time homebuyers, are advised to stay informed about rate changes as they explore mortgage products. Overall, the activities taking place in this segment suggest a responsive market trying to balance competitiveness with evolving economic landscapes.