Mortgage rate rises announced by five lenders: HSBC, Barclays and NatWest all hiking interest

Five mortgage lenders have announced they are increasing rates, in the latest blow to home buyers and those looking to remortgage.

Barclays, HSBC, NatWest, Accord and Leeds Building Society have today contacted mortgage brokers informing them they will be upping rates from tomorrow.

It comes as financial markets roll back on previous predictions on interest rate cuts, with a ‘higher for longer’ scenario now appearing more likely.

At the start of this year, markets were predicting as many as six or seven base rate cuts in 2024. This has now fallen to just two or three.

On the rise: Changing expectations surrounding the Bank of England base rate has sent mortgage rates higher

The timing of the first base rate cut has been pushed back with markets now expecting the first base rate cut to come as late as August.

As a result, mortgage lenders have been more inclined to price upwards, rather than downwards in recent months.

Fixed rate mortgage prices are reflected in Sonia swap rates. These show what lenders think the future holds concerning interest rates and this governs their pricing.

Since the start of the year two-year swaps have risen from 4.04 per cent to 4.66 While five-year swaps have risen from 3.4 per cent to 4.11 per cent.

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Nicholas Mendes, mortgage technical manager at broker John Charcol is expecting the latest wave of rate hikes will lead to more lenders following suit.

He says: ‘Swaps had increased at the end of last week following recent data announcements in the UK and US, with speculation building momentum of a delayed bank rate reduction to August adding to the likelihood of two or three bank rate reductions this year diminishing.

‘This latest move from HSBC leaves Nationwide and NatWest leading from the front on purchase and remortgage deals, which will inevitably mean service levels coming under pressure and eventually similar moves from the remaining lenders.’

How much are mortgage rates rising?

Most of the mortgage lenders are not revealing the extent of the rate hikes ahead of time, so borrowers will have to wait until tomorrow to find out.

HSBC is hiking rates across a large number of deals aimed at both new and existing customers, and this is set to impact first-time buyers, home movers and those remortgaging.

NatWest is increasing rates for internal product transfers on various two and five year deals by 10 basis points.

Both Accord and Leeds Building Society are raising rates by between 10 and 40 basis points.

Meanwhile, Barclays says it is changing the rates on a selection of products across its residential deals aimed at both home buyers and people remortgaging.

Mark Harris, chief executive of mortgage broker SPF Private Clients adds: ‘It looks as though it could be a bumpy few days for pricing.

‘Before costs of funds and volumes are more palatable, lower rates won’t return so we expect other lenders to follow suit before prices improve.’

With 1.6 million households due to remortgage over the course of this year, these changes will leave some pondering their next steps as their current deals approach expiration.

‘Although waiting for the optimal deal might seem tempting, it’s advisable to consult with a broker regularly to stay informed about available options until your deal concludes,’ adds Mendes.

‘Meanwhile, anticipation mounts at each Monetary Policy Committee meeting, with hopes for a rate reduction to provide markets with some stability and respite.’