Nationwide has increased the rates on some of its 10-year fixed mortgages by 0.3 percentage points as mortgage rates across the board seem likely to rise.
Nationwide’s cheapest 10-year fix now costs 2.99pc, with a £999 fee, for a minimum deposit of 40pc.
The increased rates are not unexpected, as UK mortgage rates are heavily influenced by movements in the global financial markets. "Swap rates" - the rates lenders pay to secure money in the market - have been increasing steadily since September and mortgage rates typically follow suit shortly afterwards.
The 10-year swap rate, shown in the chart below, has doubled in two months.
For someone borrowing 60pc of the value of a £350,000 home for 25 years, the total cost of Nationwide's 2.99pc fix over the 10-year term would be £120,880 including fees. The cheapest option for the same scenario is HSBC's fee-free 2.49pc deal, which would cost £113,150 over the fixed term - a substantial saving.
Mortgage rates hit record lows this year, as swap rates sank between January and September, with a particularly sharp fall after the EU referendum.
Lenders have not acted as quickly to increase rates, but it is unlikely that undercutting will continue.
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