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Tesco Bank increases rates on five-year fixes

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It's the latest lender to hike rates this month, as speculation of a rate rise gathers pace
Tesco Bank increases rates on five-year fixes

Tesco Bank has increased rates on its fee-free five-year fixed rate purchase and remortgage products.

The changes affected deals between 60% and 80% loan-to-value (LTV), for those with substantial deposits.

The lender highlighted six products in a note to mortgage brokers with the biggest increase being of 0.13% to an 80% LTV purchase deal, taking it to 2.24%.

Other products increased by between 0.03% and 0.07%.

All the deals allow overpayments of up to 20% of the outstanding balance each year, during the initial fixed or tracker period, with no early repayment charges.

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It is the latest lender to increase rates this month, with Barclays and NatWest among those doing so to reflect rising swap rates.

The Tesco Bank changes were made yesterday, prior to economic data from the Office for National Statistics being published today.

This data has pushed the expectation of a further Bank of England Base rate rise in May to 85%.

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