Sub-prime lender Victoria Mortgages says borrowers looking to refinance should move quickly to avoid missing out on current deals.
Victoria predicts that high-street lenders will be quick to raise lending rates after last week’s base rate increase.
It says although high-street lenders are funded largely by customer deposits and therefore an increase is not crucial to their business, they will probably waste no time in passing on the latest rise to borrowers.
Victoria says non-conforming lenders, in contrast, have to raise rates because they rely on the wholesale securitisation and swap markets to fund loans.
Nationwide was one of the first lenders to indicate that it would raise rates on variable mortgage and savings products by 0.25 per cent on February 1. Its base lending rate will rise from 6.49 to 6.74 per cent.
Victoria head of business development Simon Read says: “We are beginning to see evidence of an increase in rates as several lenders have announced they will shortly be withdrawing their product ranges, which is the first step lenders take before any repricing. Our advice to intermediaries is to ensure that any client thinking of refinancing should look to make more immediate plans before existing low rates are gone.”