HNW Lending becomes latest lender to raise rates

HNW Lending has become the latest peer-to-peer lender to raise its rates in response to the central bank’s base rate hikes.

In a note to investors, the platform revealed that it had just completed its first loan where it was able to pay a higher interest rate to lenders. This was a loan to a specialist steel manufacturing business, secured against its industrial units in Corby and at a 57 per cent loan to value (LTV).

Just a few weeks ago, this loan would have been priced at around six per cent, HNW Lending said. However, it is now targeting a return of eight per cent for investors.

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The platform added that it has another loan in legals which would also have been priced at around six per cent in the past, but said “we have managed to pass on a higher interest cost to the borrower and so are offering the loan at eight per cent.”

“Although higher interest rates will impact millions of people with mortgages, the fact that interest rates have risen means that, at last, the downwards pressure on interest rates that we have seen for a few years now has ceased,” said HNW Lending.

“Indeed, we are now able to justify charging more to borrowers and so pay higher rates of interest to lenders.”

Several platforms have opted to raise their rates in response to the market over the past few weeks. These include Assetz Capital, Loanpad, and Crowd2Fund.

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