Halifax said it was increasing rates by 0.2% on some of its fixed-rate mortgages. The rise affects mortgage applications made after 8 p.m. on Thursday, January 23, and is on home mover and first-time buyer loans.
The lender’s three-year fixed-rate remortgage loans will go up by 0.15%.
Earlier this month, Halifax dropped its remortgage rates by as much as 0.35%.
Halifax is one of the UK’s largest mortgage lenders and is owned by Lloyds Bank. Halifax’s decision to increase rates came despite its boss telling Sky News he expected three interest rate cuts this year.
Lloyds Banking Group chief executive Charlie Nunn said he expected interest rates to fall gradually “thanks to the resilience of household and business finances.”
He also warned that the UK could expect low growth because of a relative lack of investment.
Speaking at the World Economic Forum in Davos, he said: “We think there’ll be three rate cuts this year.
“Of course, most people choose to fix their mortgage for two to five years, and the pricing on that has been relatively stable, and we think that stability is likely to remain for the remainder of this year.
“Those that are on the fixed rates are in a good place, and for those that are on a variable rate, their mortgage is likely to continue to come down slowly with the base rate.
Analysts have been reluctant to call mortgage rates changes. Earlier this month, gilt yields soared to their highest level in 17 years.
Higher gilt yields can affect swap prices, which determine how lenders price fixed-rate products in particular.
Five-year swaps have risen in the last month, but uncertainty over Donald Trump’s presidency and the effect of the trade war have also pushed up gilt yields, which means the government has to pay more interest on its borrowing.
