Households are being hit with a fresh wave of mortgage rate hikes this week as lenders prepare for higher inflation and interest rates.
Nationwide Building Society, Virgin Money and TSB have all announced they will be pushing up the price of their mortgages today.
It means that sub-5 per cent deals are vanishing, with most households now having to settle for a rate between 5 and 5.5 per cent.
Most major lenders have increased their mortgage rates in recent weeks on the back of inflation concerns due to the escalation of the war in Iran and fresh increases in energy prices.
This marks a dramatic shift from six months ago. In the first two months of the year, most borrowers were able to get rates below 4 per cent with two-year fixes even going as low as 3.5 per cent at one stage.
Now the lowest five-year fix for someone remortgaging is 5.02 per cent with NatWest, while the lowest two-year fix is 5.01 per cent with Virgin Money.
Fixed rate rises: Nationwide, Virgin Money and TSB are pushing up the price of their mortgages
For someone trying to remortgage with a £400,000 home loan the difference between a 3.5 per cent rate and a 5.01 per cent rate is sizeable.
Based on a 25-year repayment term it is the difference between paying £2,003 a month and £2,341 a month.
Only those buying with a 40 per cent deposit can still secure a sub-5 per cent rate at present. However, these may be gone by the end of the week.
Yorkshire Building Society has a two-year fix at 4.93 per cent with a £1,495 fee attached while Skipton Building Society has a 4.91 per cent five-year fix with a £1,995 fee attached.
As for those with a 20 per cent deposit, the best they can hope for is 5.08 per cent.
Aaron Strutt of broker Trinity Financial said: ‘Unfortunately Nationwide will only have one fixed rate available to new customers below 5 per cent after these new rates go live, which is a two-year fix at 4.99 per cent with a £1,499 fee for those with a 40 per cent deposit.
‘We are getting to the stage where there are not many sub-5 per cent fixed rate mortgages left but there are still some decent tracker deals to choose from.
‘It would not be a surprise if more banks and building societies raise their rates over the coming days and at the moment price cuts look a long way off.’
