TSB has increased some of its mortgage rates by up to 0.2 percentage points with other providers expected to follow suit.
Fixed mortgage prices are heavily based on these rates, which follow long-term predictions for where the Bank of England base rate will go in the future.
He believes that, as a result, there may be a pause in mortgage rate reductions.
David Hollingworth of L&C Mortgages added: “Swaps have risen enough in the last week to at least put brakes on the cut to fixed rates and we may see some tweaks up too as lenders once again adjust to shifting market conditions.”
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However, several lenders are still making cuts. NatWest is cutting rates by up to 0.25 percentage points and Clydesdale Bank is also reducing its deals by up to 0.2 percentage points.
Aaron Strutt of brokers Trinity Financial said: “The economic outlook changes on a very regular basis. The base rate reductions have clearly helped bring down rates and given more people money in their pockets to spend. I suspect some members of the Monetary Policy Committee would still rather the base rate was a bit lower even though the growth rate has risen.”
Although not yet fed through to swap rates, the Bank of England cuts rates on the back of an expectation that growth would be very slow.
Nick Mendes of brokers John Charcol said: “Swaps have been increasing over the past few days as markets adjust their forecast to future bank rate movement, rather than the four [cuts] now down to three including last week’s.
“It will be lenders like TSB and building societies which will adjust more frequently as the larger lenders have larger tranches of funds to weather through any short-term volatility.”
The average two-year fixed rate mortgage is now 5.12 per cent, according to Moneyfacts, whilst the average five-year is 5.08 per cent.
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