Mortgage rates continued to edge higher this week as HSBC Holdings PLC (LSE:HSBA) was among those to hike as lenders grappled with rising swap rates.
Though sluggish economic data and news of subsiding inflation in December in recent days has paved the way for a February rate cut, banks already faced growing borrowing costs in line with a surge in government debt yields before this week’s figures.
Average two-year fixed mortgage rates climbed from 5.4739% to 5.5198% between Monday and Friday in response, according to Moneyfacts.
Reports had emerged on Wednesday that lenders were holding off re-hiking rates to keep bolstering buying activity.
However, the sentiment appeared to soon crumble, with HSBC on Thursday announcing hikes for five and two-year fixed mortgages for Friday.
Virgin Money and TSB Bank were also among those to unveil rate increases this week.
“That will probably prompt others to follow, which will be disappointing for anybody seeking to purchase or remortgage a home in the months ahead,” Knight Frank Finance managing partner Simon Gammon commented.
“That said, fairly positive inflation data from both the UK and the US this week has calmed bond markets, which suggests we’ll see a swift repricing, rather than weeks of sustained increases in mortgage rates.”