Major lenders are raising the price of their mortgages as markets respond to the conflict in the Middle East.
The war has sent shockwaves through the global economy, leading to fears of rising inflation and potentially halting the progress of interest rate cuts from the Bank of England.
Halifax will increase rates on all its two, three and five-year fixed mortgages on Tuesday, while Barclays will also raise rates on many of its home loans by 0.1 percentage points.
On Wednesday, Santander will increase some of its rates by up to 0.24 percentage points.
Nationwide Building Society has already increased fixed rates by up to 0.25 percentage points while HSBC is also raising prices. Similar announcements were also made by Natwest, Coventry Building Society and Virgin Money.
Some are predicting that average rates could rise by half a per cent in a fortnight, while one expert has said that all rates will soon rise above 4 per cent.
More expensive: Mortgage rates are on the rise and more lenders are expected to follow suit over the coming days and weeks
This morning, the average two-year fixed mortgage rate was 4.87 per cent, up from 4.84 per cent on Friday, according to Moneyfacts. Five-year fixes were 4.98 per cent, up from 4.96 per cent.
Simon Bridgland, broker at Canterbury-based mortgage broker Charwin Private Clients, thinks that rates could go up by 0.5 percentage points over the next two weeks.
‘Lenders are announcing they are upping rates across the board,’ he says. ‘By the time you have all your ducks in a row to submit an application, rates may have already increased.’
However, he said it was still worth securing a deal as soon as possible, as rates are likely to rise further.
Why are mortgage rates rising?
There is a growing expectation that the Bank of England may hold or even increase interest rates in the coming weeks and months, rather than cut them as previously forecast.
This is down to fears of a fresh inflation spike as a result of the conflict in the Middle East and the impact it could have on energy prices.
Rising energy prices tend to change future inflation expectations, and that uncertainty has filtered through into Government bond and swap markets.
The cost of government borrowing spiked once again today with five-year gilt yields rising 0.16 percentage points to 4.27 per cent, while the two-year gilt yield rose 0.21 percentage points to 4.08 per cent.
Sonia swap rates, the inter-bank lending rate on which banks base the price of their fixed mortgages, have also spiked upwards. Two-year swaps reached 3.99 per cent today, up from 3.36 per cent on 27 February.
Meanwhile, five-year swaps hit 4.09 per cent today, up from 3.41 per cent on 27 February.
As a result, it is likely we will see mortgage rates continue to rise over the coming weeks, rather than fall.
Peter Stimson, director of mortgages at the lender MPowered, says: ‘Oil and gas prices are spooking the traders.
‘This will very quickly play across into significantly higher mortgage rates – we are going to quickly see all rates go above 4 per cent and those cheap deals disappearing.
‘This is obviously not good news for mortgaged homeowners and a housing market that was showing signs of a good start to 2026.’
What to do if you need a mortgage
Rates headed up? There is now a growing expectation that the Bank of England could raise interest rates, rather than cut them to combat a potential surge in inflation
For anyone either looking to buy a home or remortgage, the advice is to act fast.
‘Nobody knows whether the conflict in the Middle East will last several weeks or several months,’ said Mark Harris, chief executive of mortgage broker SPF Private Clients.
‘Borrowers who will need a fixed-rate mortgage in the next few weeks or months should secure a rate now to avoid disappointment.’
Harris adds that a mortgage rate can be locked in further in advance than borrowers might think.
‘Most lenders will let you secure a product up to six months before you need it so if you do that now, you will have peace of mind,’ he says.
‘If the situation has improved by the time you come to take out the mortgage and rates are cheaper, you should be able to move onto a better deal at that time.
If they are more expensive, you will be glad you fixed when you did.
‘Speak to a whole-of-market broker to find out the best deal on the market for you and get the rate booked before it disappears.’