Leading UK lenders raise fixed-rate mortgage deals amid ‘market uncertainty’

In response to the “uncertainty” in the market, at least five major lenders raised their rates on fixed mortgages on Tuesday. This increased pressure on those who are looking to buy a home or remortgage.

Barclays, HSBC (part of Yorkshire Building Society), NatWest, Accord mortgages and Leeds building societies have all increased the price of certain fixed-rate offers. Some of these fixed-rate deals have seen a rise up to 0.4 percent points.

Money market swaps rates, which are a major factor in the pricing of fixed-rate deals, “have increased slightly” as a result of Bank of England expectations. This has prompted lenders to re-price their deals. Danny Belton is head of lending for Mortgage Advice Bureau, whose firm offers mortgage advice.

Belton said that buyers and remortgagers should “not panic” because there are still some great deals and lenders who will hold rates or prices down.

Over the past two years, mortgage costs have been on a roller coaster. After the September 2022 mini budget, many fixed-rate deals reached or above 6%. However, at the beginning of this year the prices dropped dramatically.

During recent weeks the mortgage market has been relatively calm, but figures released last week showing a smaller-than-expected drop in inflation in March caused some economists to push back their forecasts for when the Bank starts to cut interest rates. Investors in the City are pricing two rate reductions by the end the year.

Some lenders, such as Accord, have raised selected rates up to 0.4 percent points. Others such as NatWest chose a smaller increase: It has increased some of its “switcher deals” for existing customers for two- and five year periods by 0.1 percent points.

Nicholas Mendes is the mortgage technical manager for John Charcol. He said that lenders have “adjusted” their positions due to the uncertainty in the market, but he also added that the borrowers are unlikely to see the same volatility and high interest rates as they did last year.

Moneyfacts, a financial data provider, reported on Tuesday that the rate of a two-year fixed-rate contract had increased slightly from 5.8% to 5.83%. The typical rate for a five-year fixed-rate deal is now 5.4%, up from 5.38% in April.

The cheapest “best-buys” for two and five years were priced this week at 4.46% apiece.