Fleet Mortgages, Lendco and others have pulled products as markets begin to price in higher mortgage rates.   

Fleet Mortgages says it is temporarily withdrawing all of its fixed-price mortgages in a note to brokers this morning by “midday Thursday 25th May 2023”.    

It adds: “We will relaunch a full product range within the next few days so we will share full details then.”    

It did not give a reason for this withdrawal.    

Lendco and Platform said they would withdraw products at 5pm this evening,  

However, Platform says it will have a range of new products available on Friday morning following its “usual process,” which includes 25-basis-point rises for standard variable rate and tracker products across new business and switch ranges.  

But it adds that two- and three-year fixes will be cut by up to 21bps for new business, while selected two-, three- and five-year fixes will fall by up to 22bps for product switches.  

The move comes after inflation yesterday fell to 8.7% in the year to April, driven by clothing and food prices rising at their fastest rate for almost 45 years.    

This figure is down from 10.1% in March, but above the 8.2% figure investors expected, according to Office for National Statistics data.    

The ONS added that core inflation – which strips out energy, food, alcohol and tobacco – is at a 31-year high.    

This has caused investors to bet that interest rates, which rose by 25bps to 4.5% earlier this month, will rise further this year, with some estimates as high as 5.5% by the end of the year.    

Swap rates, which influence mortgage pricing, lifted this afternoon, with the two-year swap at 5.0%, up from around 4.7% earlier this week, according to Chatham Financial.    

Five-year swap rates stand at 4.5% up from around 4.3% earlier this week.   

Rising swap rates may see further lender repricing, say observers, while others argue that at the very least the downward trend of mortgage rates is likely to pause.    

Hargreaves Lansdown head of personal finance Sarah Coles says: “For those waiting and hoping for fixed mortgage rates to fall, there could be a lot more waiting and a lot less hope.    

“Rising swaps rates mean fixed-rate mortgages will be pushed higher in the short term.    

“Meanwhile, concerns about the stickiness of inflation are likely to mean we won’t get Bank of England cuts this side of the New Year, so mortgage rates are unlikely to head south as fast as people were hoping.    

“Anyone waiting it out on a variable rate, meanwhile, will be paying a higher price for longer.    

If you’re looking for a fixed-rate mortgage right now, this is horrible timing, because the market is likely to be running hot in the short term.    

“There is the hope that over time, this proves to be a spike, but there are no guarantees.   

“It leaves you with the option of fixing at a higher rate than planned, opting for a variable rate in the hope fixes will come down, or holding off until the picture is clearer.    

“None of these are ideal – and none are brilliant indicators for the property market either.”    

Fleet Mortgages, Lendco and Platform were all contacted.