TSB increase fixed rates by up to 0.75%

TSB are the latest lender to increase their Fixed Rates, with some rates up to 0.75% higher for Shared ownership deals.

We have asked the Newspage Mortgage Brokers about these rate changes, why the rate increases are higher than other lenders, and will this encourage other lenders to increase again.

Justin Moy, managing director at EHF Mortgages said “Significant increases across the board from TSB, with the highest increase for those looking to buy Shared Ownership properties.

“Without Help to Buy, Shared Ownership has become the go-to scheme for affordable housing, so to make those specific mortgage deals less affordable is somewhat contradictory, but with these rate hikes it is inevitable that other lenders will follow the TSB, and we just see more of the market shut down and suffer.”

Ken James, director at Contractor Mortgage Services said, “As lenders scramble for safety, the mortgage landscape appears increasingly grim.

“With swap rates on the rise, lenders are transparent about their need for profit margins, prompting them to hike up their rates accordingly.

“The significant uptick in rates for shared ownership mortgages suggests that TSB is distancing itself from this sector, leaving aspiring homeowners with even fewer options.

“While TSB may be the latest target of criticism, they are not alone in seeking refuge in lifeboats, as more lenders follow suit. The mortgage market is once again thrown into turmoil, echoing past upheavals.”

Tracey Dixon, broker at Pure Mortgage and Protection added, “There are several possible reasons why TSB has increased its rates more than other lenders.

“Elevated Funding Costs: TSB may face heightened expenses in accessing the funds they lend out.

“This could stem from factors such as intensified competition for funds in the market.

“Perception of Shared Ownership Risk: TSB might perceive shared ownership mortgages as carrying increased risk. This perception could arise from potential economic downturns or uncertainties within the shared ownership market.

“Strategic Decision-making: It’s conceivable that TSB is strategically raising rates to target specific borrower segments or deter applications deemed too risky.

“In assessing whether other lenders will follow suit, it remains premature to draw definitive conclusions. Observing the market’s response and whether other lenders encounter similar pressures will provide clarity moving forward.”