David Hollingworth, of L&C Mortgages, said: “Rates have been shifting rapidly as lenders adapt to higher borrowing costs from the central bank. The sheer pace of change is taking borrowers by surprise.”
Changes have accelerated in the past few days in anticipation of another Bank Rate increase next week, with lenders now increasing costs for borrowers on a weekly basis. Mr Hollingworth warned deals were being advertised for a matter of days before being pulled and replaced with higher charges.
In February alone, nervous lenders pulled more than 500 mortgages from the market, the biggest monthly drop since May 2020 – when banks were braced for economic fallout in the height of the pandemic.
Borrowers who have lapsed onto their lender’s standard variable rate, which is typically much more expensive than a fixed-rate deal, have been worst hit. The average rate is 4.14pc, according to L&C Mortgages, equal to an additional £2,107 each year on a £150,000 mortgage, when compared with the average two-year deal.