UK Mortgage Lenders Hike Rates Despite 2.6% Inflation Drop as Base Rate Holds at 3.75%
Updated
Updated · Mortgage Professional · Jul 22
UK Mortgage Lenders Hike Rates Despite 2.6% Inflation Drop as Base Rate Holds at 3.75%
3 articles · Updated · Mortgage Professional · Jul 22
Summary
Around 90% of UK lenders had already raised mortgage rates before June inflation slowed to 2.6%, leaving borrowers little immediate benefit from the softer CPI reading.
Elevated swap rates — driven in part by renewed Iran tensions — have overridden the Bank of England's steady 3.75% base rate, with brokers saying lenders are repricing ahead of policy signals and with minimal notice.
One in five cases at one advisory firm is now debt consolidation, while brokers say clients coming off fixed deals are increasingly considering tracker mortgages because they often price below fixed-rate products.
The June inflation miss has strengthened expectations that the Bank of England will hold rates at its July 30 meeting, but brokers say market volatility and confusion over how mortgage pricing works are still hurting households.