The UK mortgage market is experiencing significant changes as major lenders adjust their rates and new regulations come into effect. With the recent surge in switching due to updated FCA affordability rules, borrowers are finding it easier to remortgage, while lenders are responding to rising funding costs by increasing rates across various products.
What are the latest changes in the mortgage market?
Several prominent lenders, including Barclays, Halifax, HSBC, and TSB, have recently raised selected mortgage rates by up to 20 basis points. This trend is largely attributed to increasing swap rates, which are driving up funding costs for these institutions. NatWest has also joined this wave of rate hikes, affecting both residential and buy-to-let mortgages.
In contrast, Shawbrook has bucked the trend by reducing some rates, although Keystone has increased its buy-to-let offerings. Additionally, Santander has announced an increase in fixed mortgage rates across its new business and product transfer ranges, effective from 22 July. This includes the introduction of new 10-year fixed deals and expanded options for new builds.
How are borrowers affected by the FCA’s new rules?
The Financial Conduct Authority’s (FCA) updated affordability rules have led to a notable increase in switching activity among borrowers. Research from Stonebridge indicates that 98% of modified affordability assessments in Q1 2026 were utilized for external remortgages. This change allows more borrowers to explore better mortgage options rather than remaining with their current lenders.
As a result, borrowers may find more competitive rates and terms available, making it an opportune time to reassess their mortgage arrangements. This shift not only benefits individual borrowers but also enhances competition within the mortgage market.
What does this mean for landlords and investors in the mortgage market?
Landlords and property investors should be particularly attentive to the recent rate increases and the evolving regulatory market. With major lenders adjusting their rates, it may become more challenging to secure favourable borrowing terms. However, the FCA’s new rules may provide opportunities for landlords to switch lenders and access better deals.
Moreover, the recent acquisition of TSB by Santander has expanded Santander UK’s mortgage book by £35.7 billion, making it the fourth-largest mortgage lender in the UK. This growth could lead to increased competition and potentially more attractive offers for landlords and investors looking for financing options.
What should brokers watch for in the mortgage market?
Brokers need to stay informed about the shifting rates and product offerings from various lenders. The launch of Vida’s rebranded later-life mortgage proposition, Next Chapter Lending, introduces updated criteria aimed at supporting older first-time buyers and borrowers extending mortgages into retirement. This could open new avenues for brokers to assist clients in navigating their options.
Additionally, the introduction of Finova’s AI-powered tool promises to streamline the application process, reducing the need for manual data entry across lender portals. This innovation may enhance efficiency for brokers and improve client experiences.
Frequently asked questions
What should I do if my lender raises rates?
If your lender raises rates, consider exploring your options for remortgaging. The FCA’s new affordability rules may make it easier to switch to a more competitive lender, potentially saving you money on your mortgage payments.
How can I find the best mortgage rates available?
To find the best mortgage rates, compare offers from various lenders. Utilize tools like mortgage rate comparison sites to assess your options and identify the most suitable deals for your financial situation.