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Half of all lenders pulled cheap rates ahead of BoE decision

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Half of all mortgage lenders have pulled at least one of their best deals since the start of October, anticipating imminent rate rises, Moneyfacts says.

For example, Yorkshire Building Society withdrew its two-year fixed rate deal priced at 0.99 per cent on October 12, the Telegraph reports.

At the time this was the cheapest two-year fix available.

The removal of many of these low cost deals will mean borrowers are faced to pay higher lending costs, regardless of whether or not the Bank of England raises interest rates this month.

It has been widely anticipated that the Bank of England will be forced to raise the Bank Rate for the first time in more than a decade in a bid to check inflationary pressures.

City experts have been predicting a modest rise, from 0.25 per cent to 0.5 per cent when the Monetary Policy Committee meets today.

Although this rise may be modest, there are concerns that it could hit many borrowers, particularly at a time when wages remain stagnant and prices for goods and services are rising steeply.

It is not just lenders that are anticipating a rate rise.

Evidence suggests that there has a been a surge in the number of people remortgaging in the past month, as people try to secure lower-cost fixed rate deals ahead of a rate rise.

Conveyancing specialist LMS said the company has seen the number of remortgage deals “skyrocket” over the past month.

LMS chief executive Nick Chadbourne says that research among its customer base found that more than half (56 per cent) feared an impending rate rise.

He adds: “This is a significant increase from the 45 per cent seen in August. Anticpiation of a rate rise is driving this surge in demand for remortgaging.

“And with mortgage rates the second-lowers on record it is not surprising borrowers are taking the initiative to lock into these low rates.”

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