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Mortgage lenders raise rates amid uncertainty over BoE interest rate cuts

Yahoo

16 minutes ago

Yahoo

Mortgage lenders raise rates amid uncertainty over BoE interest rate cuts

Many of the major lenders raised their mortgage rates this week, amid uncertainty over the pace of future interest rate cuts by the Bank of England. The average rate for a two-year fixed mortgage stands at 4.89%, while five-year fixed deals average 5.09%, according to data from Uswitch. Comments by Bank of England governor Andrew Bailey at a cross-party Treasury select committee session on Tuesday over the impact of US president Donald Trump's tariffs on policymaking cast more doubt over the central bank's pace of rate cuts. Bailey said that while the interest rate "path remains downwards, but how far and how quickly is now shrouded in a lot more uncertainty, frankly.' The Bank of England has cut interest rates from 4.5% to 4.25% in early May, meaning the average homeowner on a tracker mortgage will see their monthly repayments fall by nearly £29, after the quarter-point snip to the base rate. However, the primary inflation measure, the Consumer Price Index (CPI), stood at 3.5% in the 12 months to April, a higher-than-expected increase from the previous month. That means price increases are moving away from the BoE's 2% target. This week, no major lender cut rates, with the majority hiking mortgages for first-time buyers as the market moves away from the mini price war that pushed deals deep into under-4% territory. HSBC (HSBA.L) has a 4.01% rate for a five-year deal, which is up from the previous week. For those with a Premier Standard account with the lender, this rate is 3.98%. Looking at the two-year options, the lowest rate is 3.96% on a Premier Standard account with a £999 fee, slightly higher from the previous week. Both cases assume a 60% loan-to-value (LTV) mortgage, meaning buyers need to have at least 40% for a deposit. HSBC offers 95% LTV deals, meaning you only need to save for a 5% deposit. However, the rates are much higher, with a two-year fix at 5.05% or 4.89% for a five-year fix. This is because their financial situation and deposit size determine the rate someone can get. The larger the deposit, the lower the LTV, allowing buyers to access better deals because lenders consider them less risky. NatWest's (NWG.L) five-year deal is 3.99% with a £1,495 fee, which is unchanged from last week. The cheapest two-year fix deal is 3.94%, which is also unchanged from last week. You'll need at least a 40% deposit to qualify for the rates in both cases. At Santander (BNC.L), a five-year fix is 4.08% for first-time buyers, higher than the previous 3.93%. It has a £999 fee, assuming a 40% deposit. Read more: Average first-time buyers in London need almost £140,000 for a deposit For a two-year deal, customers can also secure a 4.01% offer, with the same £999 fee, higher than the previous 3.90%. Barclays (BARC.L) was the first among major lenders to bring back under-4% deals and currently has a five-year fix at 3.99%, which is slightly higher than 3.89% last week. For "premier" clients, this rate dips to 3.98%. The lowest for two-year mortgage deals is 3.97%, which is also up on 3.87% last week. Barclays has launched a mortgage proposition to help new and existing customers access larger loans when purchasing a home. The initiative, known as Mortgage Boost, enables family members or friends to effectively "boost" the amount that can be borrowed toward a property without needing to lend or gift money directly or provide a larger deposit. Read more: Best credit card deals of the week Under the scheme, a borrower's eligibility for a mortgage can increase significantly by including a family member or friend on the application. For example, an individual with a £37,500 annual income and a £30,000 deposit might traditionally be able to borrow up to £168,375, enabling them to purchase a home priced at around £198,375. However, with Mortgage Boost, the total borrowing potential can rise substantially if a second person, such as a parent, joins the application. In this case, if the second applicant also earns £37,500 a year, the combined income could push the borrowing limit to £270,000, enabling the buyer to afford a home worth up to £300,000. Nationwide (NBS.L) offers a five-year fix at 4.24%, with a £999 fee and a 40% deposit and was down from 4.34% last week. Nationwide offers a two-year fixed rate for home purchase at 4.04% with a £999 fee — also for borrowers with a 40% deposit. Again, down from 4.34% in the previous week. The lender has announced it is changing the eligibility criteria for its mortgage scheme, which allows people to borrow up to six times their income. The minimum income required to take out a Helping Hand mortgage has been reduced to £35,000 — meaning more people will be eligible for the scheme. The minimum income requirement for joint applications will remain at £55,000. Helping Hand mortgages enable people to borrow up to six times their income, meaning potential homeowners can borrow 33% more compared to Nationwide's standard lending at 4.5 times income. Halifax, the UK's biggest mortgage lender, offers a five-year rate of 4.03% (also 60% LTV). The lender, owned by Lloyds (LLOY.L), offers a two-year fixed rate deal at 4%, with a £999 fee for first-time buyers. Read more: How to negotiate house prices It also offers a 10-year deal with a mortgage rate of 4.78%. The lender has announced the launch of a new 1.5-year fixed-rate remortgage product in response to growing demand among borrowers for shorter-term deals. Shorter-term fixes offer certainty over monthly payments while allowing households to switch to a new deal sooner to take advantage of lower rates. As providers start hiking rates, prospective homeowners are quickly running out of good options. HSBC's (HSBA.L) 3.98% is currently the cheapest deal for five-year fixes and for two-year fixes at 3.96%, though access requires a hefty 40% deposit. The average UK house price is £273,427, so a 40% deposit equals about £120,000. A growing number of homeowners in the UK are opting for 35-year or longer mortgage terms, with a significant rise in older borrowers stretching their repayment periods well into their 70s. Read more: UK house prices rise in May as higher wages, low unemployment boost market Lender April Mortgages offers buyers the chance to borrow up to seven times their income on loans fixed for five to 15 years. Both those buying alone and those buying with others can apply for the mortgage. As part of the independent Dutch asset manager DMFCO, the company offers interest rates starting at 5.15% and an application fee of £195. Skipton Building Society has also said it would allow first-time buyers to borrow up to 5.5 times their income to help more borrowers get on the housing ladder. Leeds Building Society is increasing the maximum amount that first-time buyers can potentially borrow as a multiple of their earnings with the launch of a new mortgage range. Aspiring homeowners with a minimum household income of £40,000 may now be able to borrow up to 5.5 times their earnings. Mortgage holders and borrowers have faced record-high repayments in recent years, as the Bank of England's base rate has been passed on by banks and building societies. According to UK Finance, 1.3 million fixed mortgage deals are set to end in 2025. Many homeowners will hope the Bank of England acts quickly to cut rates more aggressively. At the same time, savers will likely root for rates to remain at or near their current levels. Read more: Best credit card deals of the week UK mortgage approvals drop for third month in a row How next week's spending review could impact your financesError in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Analysis: Trump is increasingly hostile to China. He's playing with fire

CNN

2 hours ago

CNN

Analysis: Trump is increasingly hostile to China. He's playing with fire

Despite widespread concerns that the trade war is dragging down America's economy, President Donald Trump has notched quite a few wins on his economic belt in recent weeks. Inflation keeps falling. Jobs remain plentiful. And there's growing evidence the economy could be booming this quarter. That's why Trump's increasingly hostile rhetoric about China over the past week was particularly concerning ahead of his call Thursday with Chinese leader Xi Jinping. Trump's economy is cookin' – for now. But the economic Jenga tower the Trump administration has constructed is precariously balanced on a host of economic caveats and unproven theories. Renewed trade tensions with the world's second-largest economy threatens to knock the tower to the ground. May 12 represented a major turning point for the global trade war. Delegates from China and the United States announced they would significantly roll back their historically high tariffs on one another. Markets were elated. Wall Street banks curtailed their recession forecasts. And moribund consumer confidence rebounded significantly. That's a significant change from April, when tensions ran so high that trade between the United States and China came to an effective halt. The 145% tariffs on most Chinese imported goods made the math impossible for American businesses to buy virtually anything from China, America's second-largest trading partner. No one wants to return to that. Treasury Secretary Scott Bessent, America's chief negotiator in the détente with China, said previous tariff levels were 'unsustainable.' That's why he said the countries put in place mechanisms to prevent a re-escalation. But Trump and his administration in recent weeks have grown increasingly hostile toward China, accusing the country of breaking the promises it made in mid-May. China has similarly said the United States has failed to live up to its obligations under the agreement. Trump and Xi held a long-awaited phone call Thursday, a person familiar with the matter said. The White House did not immediately confirm the call, which was also reported by Chinese state media. If the call fails to result in another de-escalation, tensions could boil over, and tariffs could rise again. So could recession forecasts. And the good vibes that have powered a rebound in sentiment and a massive market rally could disappear in a flash. Although virtually no economic reports are entirely good or bad, and with the obvious caveat that monthly economic data are inherently backward looking, US data have been surprisingly resilient lately. Annual consumer prices grew just 2.3% in April, according to the Consumer Price Index, and inflation that month fell to 2.1%, according to the separate Personal Consumption Expenditures price index. The PCE report is particularly noteworthy, because the Federal Reserve favors that report when it considers whether to change interest rates. Over time, the Fed targets 2% inflation, so America is, at long last, nearing that long-term target after a yearslong bout with historic price hikes. Trump, citing America's low inflation rate, has been bullying Federal Reserve Chair Jerome Powell to cut interest rates to boost the economy – even summoning Powell to the White House last week to give him a talking to. As Powell has noted, economic data is looking strong. Jobs data, although weakening, has steadied in recent months. The unemployment rate is hovering at just over 4%, and employers have added a solid number of jobs each month. The number of available jobs in America unexpectedly increased in April, a potential indicator that the labor market remains robust. And a positive effect of trade tensions could at least temporarily benefit America's economy. Gross domestic product, the broadest measure of the economy, shifted into reverse in the first quarter as businesses stockpiled goods in anticipation of tariffs. This quarter, imports from foreign countries – particularly China – have fallen dramatically. In April, the US trade deficit shrank by its steepest monthly pace on records, which go back to 1992. That should give America a big, albeit momentary, boost. The Atlanta Fed's GDPNow tool currently predicts the US economy will grow at an adjusted annualized rate of 4.6% this quarter, a huge number that would more than make up for the -0.2% rate in the first quarter. But Trump's ramping up of restrictions and public scrutiny of China risks putting sugar in the gas tank just as the engine started humming again. Trump on Wednesday said in a Truth Social post that Chinese leader Xi Jinping was 'extremely hard to make a deal with.' Trade talks have stalled, Bessent said, apparently frustrating Trump. Last week, Trump posted on social media that China 'TOTALLY VIOLATED ITS AGREEMENT WITH US.' Trump said that he made a 'fast deal' with China to 'save them from what I thought was going to be a very bad situation.' He added: 'So much for being Mr. NICE GUY!' The Trump administration had expected China to lift restrictions on rare earth materials that are critical components for a wide range of electronics, but China has so far refused, causing intense displeasure inside the Trump administration and prompting a recent series of measures to be imposed on the country three administration officials told CNN last week. For example, the White House warned US companies against using AI chips made by China's national tech champion Huawei. It stopped US companies from selling to China software that is used to design semiconductors. And the US State Department announced it would 'aggressively revoke visas' for some Chinese students in America. China, in turn, has accused the United States of 'provoking new economic and trade frictions.' 'The United States has been unilaterally provoking new economic and trade frictions, exacerbating the uncertainty and instability of bilateral economic and trade relations,' the Chinese Commerce Ministry said Sunday. Meanwhile, it's not like tariffs have completely evaporated. The United States maintains a 10% universal tariff on most goods coming into the country, and Trump just doubled tariffs on steel and aluminum this week. He has threatened higher tariffs on dozens of countries that are unable to reach trade deals with the administration over the course of the next month. And China and the United States, despite their de-escalation last month, maintain significant, double-digit tariffs on one another. Economists, Wall Street analysts, business leaders and consumers continue to sound the alarm bell about the trade war, worrying about a toxic combination of rising prices and slowing economic growth. Despite the recent spate of good economic news, some underlying data is raising concerns. A government report this week showed layoffs in April leapt higher by nearly 200,000 to 1.786 million, reversing a similarly sized drop seen in March. Initial unemployment claims rose to 247,000 last week, far more than estimated. And outplacement firm Challenger, Gray & Christmas reported Thursday that American employers announced 94,000 layoffs in May – down 12% from April but up 47% from last year. Layoff announcements have spiked 80% this year. Last week, a key economic report showed consumer spending rose just 0.2% in April, a weaker-than-anticipated reading and a significant retreat from March. And some consumer and business survey data remain incredibly weak. Consumer sentiment remained near historic lows reached in March despite recent trade deal announcements, according to the University of Michigan. And the Fed's beige book, a collection of business leaders' reactions to the economic environment, showed that companies across industries are remaining deeply uncertain about the economy – particularly because of the trade war. So good news could ultimately turn bad, even without escalating tensions with China. But a return to tit-for-tat tariffs and closed borders could make matters significantly worse.

Yahoo

3 hours ago

Yahoo

Mortgage lenders raise rates amid uncertainty over BoE interest rate cuts

Many of the major lenders raised their mortgage rates this week, amid uncertainty over the pace of future interest rate cuts by the Bank of England. The average rate for a two-year fixed mortgage stands at 4.89%, while five-year fixed deals average 5.09%, according to data from Uswitch. Comments by Bank of England governor Andrew Bailey at a cross-party Treasury select committee session on Tuesday over the impact of US president Donald Trump's tariffs on policymaking cast more doubt over the central bank's pace of rate cuts. Bailey said that while the interest rate "path remains downwards, but how far and how quickly is now shrouded in a lot more uncertainty, frankly.' The Bank of England has cut interest rates from 4.5% to 4.25% in early May, meaning the average homeowner on a tracker mortgage will see their monthly repayments fall by nearly £29, after the quarter-point snip to the base rate. However, the primary inflation measure, the Consumer Price Index (CPI), stood at 3.5% in the 12 months to April, a higher-than-expected increase from the previous month. That means price increases are moving away from the BoE's 2% target. This week, no major lender cut rates, with the majority hiking mortgages for first-time buyers as the market moves away from the mini price war that pushed deals deep into under-4% territory. HSBC (HSBA.L) has a 4.01% rate for a five-year deal, which is up from the previous week. For those with a Premier Standard account with the lender, this rate is 3.98%. Looking at the two-year options, the lowest rate is 3.96% on a Premier Standard account with a £999 fee, slightly higher from the previous week. Both cases assume a 60% loan-to-value (LTV) mortgage, meaning buyers need to have at least 40% for a deposit. HSBC offers 95% LTV deals, meaning you only need to save for a 5% deposit. However, the rates are much higher, with a two-year fix at 5.05% or 4.89% for a five-year fix. This is because their financial situation and deposit size determine the rate someone can get. The larger the deposit, the lower the LTV, allowing buyers to access better deals because lenders consider them less risky. NatWest's (NWG.L) five-year deal is 3.99% with a £1,495 fee, which is unchanged from last week. The cheapest two-year fix deal is 3.94%, which is also unchanged from last week. You'll need at least a 40% deposit to qualify for the rates in both cases. At Santander (BNC.L), a five-year fix is 4.08% for first-time buyers, higher than the previous 3.93%. It has a £999 fee, assuming a 40% deposit. Read more: Average first-time buyers in London need almost £140,000 for a deposit For a two-year deal, customers can also secure a 4.01% offer, with the same £999 fee, higher than the previous 3.90%. Barclays (BARC.L) was the first among major lenders to bring back under-4% deals and currently has a five-year fix at 3.99%, which is slightly higher than 3.89% last week. For "premier" clients, this rate dips to 3.98%. The lowest for two-year mortgage deals is 3.97%, which is also up on 3.87% last week. Barclays has launched a mortgage proposition to help new and existing customers access larger loans when purchasing a home. The initiative, known as Mortgage Boost, enables family members or friends to effectively "boost" the amount that can be borrowed toward a property without needing to lend or gift money directly or provide a larger deposit. Read more: Best credit card deals of the week Under the scheme, a borrower's eligibility for a mortgage can increase significantly by including a family member or friend on the application. For example, an individual with a £37,500 annual income and a £30,000 deposit might traditionally be able to borrow up to £168,375, enabling them to purchase a home priced at around £198,375. However, with Mortgage Boost, the total borrowing potential can rise substantially if a second person, such as a parent, joins the application. In this case, if the second applicant also earns £37,500 a year, the combined income could push the borrowing limit to £270,000, enabling the buyer to afford a home worth up to £300,000. Nationwide (NBS.L) offers a five-year fix at 4.24%, with a £999 fee and a 40% deposit and was down from 4.34% last week. Nationwide offers a two-year fixed rate for home purchase at 4.04% with a £999 fee — also for borrowers with a 40% deposit. Again, down from 4.34% in the previous week. The lender has announced it is changing the eligibility criteria for its mortgage scheme, which allows people to borrow up to six times their income. The minimum income required to take out a Helping Hand mortgage has been reduced to £35,000 — meaning more people will be eligible for the scheme. The minimum income requirement for joint applications will remain at £55,000. Helping Hand mortgages enable people to borrow up to six times their income, meaning potential homeowners can borrow 33% more compared to Nationwide's standard lending at 4.5 times income. Halifax, the UK's biggest mortgage lender, offers a five-year rate of 4.03% (also 60% LTV). The lender, owned by Lloyds (LLOY.L), offers a two-year fixed rate deal at 4%, with a £999 fee for first-time buyers. Read more: How to negotiate house prices It also offers a 10-year deal with a mortgage rate of 4.78%. The lender has announced the launch of a new 1.5-year fixed-rate remortgage product in response to growing demand among borrowers for shorter-term deals. Shorter-term fixes offer certainty over monthly payments while allowing households to switch to a new deal sooner to take advantage of lower rates. As providers start hiking rates, prospective homeowners are quickly running out of good options. HSBC's (HSBA.L) 3.98% is currently the cheapest deal for five-year fixes and for two-year fixes at 3.96%, though access requires a hefty 40% deposit. The average UK house price is £273,427, so a 40% deposit equals about £120,000. A growing number of homeowners in the UK are opting for 35-year or longer mortgage terms, with a significant rise in older borrowers stretching their repayment periods well into their 70s. Read more: UK house prices rise in May as higher wages, low unemployment boost market Lender April Mortgages offers buyers the chance to borrow up to seven times their income on loans fixed for five to 15 years. Both those buying alone and those buying with others can apply for the mortgage. As part of the independent Dutch asset manager DMFCO, the company offers interest rates starting at 5.15% and an application fee of £195. Skipton Building Society has also said it would allow first-time buyers to borrow up to 5.5 times their income to help more borrowers get on the housing ladder. Leeds Building Society is increasing the maximum amount that first-time buyers can potentially borrow as a multiple of their earnings with the launch of a new mortgage range. Aspiring homeowners with a minimum household income of £40,000 may now be able to borrow up to 5.5 times their earnings. Mortgage holders and borrowers have faced record-high repayments in recent years, as the Bank of England's base rate has been passed on by banks and building societies. According to UK Finance, 1.3 million fixed mortgage deals are set to end in 2025. Many homeowners will hope the Bank of England acts quickly to cut rates more aggressively. At the same time, savers will likely root for rates to remain at or near their current levels. Read more: Best credit card deals of the week UK mortgage approvals drop for third month in a row How next week's spending review could impact your finances

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Mortgage lenders raise rates amid uncertainty over BoE interest rate cuts

Analysis: Trump is increasingly hostile to China. He's playing with fire

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Parking fees have increased at Hartsfield-Jackson Atlanta International Airport

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Mortgage lenders raise rates amid uncertainty over BoE interest rate cuts

Analysis: Trump is increasingly hostile to China. He's playing with fire

Mortgage lenders raise rates amid uncertainty over BoE interest rate cuts

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