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Highlights
- Banking firms in the UK are set to withdraw their cheapest mortgage offers from the market.
- The Bank of England is expected to raise interest rates from a record low of 0.1% in November or December this year to counter inflation.
- While Barclays has made adjustments to some of its fixed-rate mortgage deals, Lloyds and Nationwide Building Society are other key mortgage providers expected to make changes to their offerings.
Banking firms in the UK are set to withdraw their cheapest mortgage offers from the market on the back of speculation of a rise in interest rates, thereby increasing the costs of home loans. The Bank of England is expected to raise interest rates from a record low of 0.1% in November or December this year to counter inflation. The annual cost of the UK’s mortgages is slated to increase by £14 billion.
Nevertheless, borrowers will not be affected immediately, as about 60% of the country’s total mortgages are on fixed rates. Borrowers on variable deals will be affected directly by the new changes in interest rates. Barclays has made adjustments to some of its fixed-rate mortgage deals, Lloyds and Nationwide Building Society are other key mortgage providers expected to make changes to their deals.
(Data source: EODHD/Others)
Nationwide Building Society (LON: NBS)
Nationwide is one of the largest building societies in the world and a provider of savings and mortgages in the UK. Last month, Nationwide Building Society launched the Authorised Push Payment (APP) Scam Checker Service to prevent members from being scammed.
The shares of Nationwide Building Society are trading at GBP 190.00 at 10:00 AM BST on Tuesday 19 October 2021. The market cap currently stands at £2,005.55 million.
Nationwide Building Society recorded an underlying profit before tax of £790 million for 2021 compared to £469 million in 2020. Its total gross mortgage lending was £29.6 billion in 2021 compared to £30.9 billion in 2020. Its membership was 16.3 million in 2021.
Barclays Plc (LON: BARC)
Barclays is a universal bank that offers its clients a range of mortgages for investment and residential properties. Barclays announced an increase in its five-year fix at 75% LTV to 1.31% from the previous 1.21%. It also announced increasing its two-year fix at 60% LTV to 0.91% from 0.86%.
The shares of Barclays are trading at GBX 199.52, up by 0.03% at 10:59 AM BST on Tuesday 19 October 2021. The market cap currently stands at £33,589.18 million.
Barclays recorded a profit before tax of £5.0 billion and a RoTE of 16.4% in H1 2021. The group’s total income for H1 2021 was £11.3 billion. The company’s board announced an interim dividend payout of 2 pence per share for shareholders.
Lloyds Banking Group Plc (LON: LLOY)
Lloyds Banking Group is an FTSE 100 listed financial services company that also offers mortgage services to clients. The group recorded a profit before tax of £3.9 billion of H1 ended 30 June 2021 compared to £290 million loss in H1 2020.
The shares of Lloyds Banking Group are trading at GBX 49.38, up by 0.21% at 11:15 AM BST on Tuesday 19 October 2021. The market cap currently stands at £34,983.10 million.
Lloyds Banking Group’s RoTE was 19.2% for H1 2021. It announced an interim dividend of 0.67 pence per ordinary share to shareholders.
