The UK mortgage market is experiencing significant shifts as major lenders raise rates and new affordability rules facilitate borrower switching. Recent changes from the FCA have made it easier for borrowers to switch lenders, which is critical in the current economic climate where costs are rising.
What are the recent changes in the mortgage market?
Several major UK lenders, including Barclays, Halifax, HSBC, TSB, and NatWest, have announced increases in selected mortgage rates by up to 20 basis points. This trend is largely driven by rising swap rates, which are pushing up funding costs for lenders. While many lenders are raising rates, Shawbrook has bucked the trend by reducing some of its rates, although Keystone has also increased selected buy-to-let rates.
How are borrowers affected by the FCA’s new affordability rules?
The recent changes to affordability assessments introduced by the FCA are having a profound impact on the mortgage market. Research from Stonebridge indicates that 98% of modified affordability assessments in Q1 2026 were used for external remortgages. This means that borrowers are now finding it easier to switch to new lenders rather than staying with their current providers, which can lead to better mortgage deals and savings.
What does this mean for landlords and investors in the mortgage market?
For landlords and property investors, the rising rates could mean increased costs for new mortgages and remortgages. However, the ease of switching lenders due to the new FCA rules may provide opportunities to secure more competitive rates. Additionally, the increase in mortgage lending, as evidenced by Santander UK’s growth of £35.7 billion following its acquisition of TSB, suggests a robust demand for mortgages, which could influence property investment strategies.
What should borrowers watch for next in the mortgage market?
Borrowers should keep an eye on the ongoing rate adjustments from lenders and consider taking advantage of the current FCA rules to switch lenders if it benefits their financial situation. With major lenders like Santander expanding their product offerings, including new 10-year fixed deals, borrowers have options to explore. Additionally, the recent appointment of Prime Minister Andy Burnham, who has pledged to focus on housing and accelerate housebuilding, may lead to further developments in the market that could impact borrowing conditions.
Frequently asked questions
What are the implications of rising mortgage rates?
Rising mortgage rates can increase monthly payments for borrowers, making homeownership more expensive. This may lead some buyers to reconsider their purchasing decisions or explore remortgaging options to secure better rates.
How can borrowers benefit from the new FCA affordability rules?
The new FCA affordability rules allow more borrowers to switch lenders easily, potentially leading to lower rates and better mortgage terms. This is especially beneficial for those looking to remortgage and save on their monthly payments.