Average fixed mortgage rates have recorded their sharpest daily rise in months, according to new figures from financial information provider Moneyfactscompare.co.uk.
The average two-year fixed residential mortgage rate increased to 5.54% on Tuesday, rising from 5.50% the previous day. Meanwhile, the typical five-year fixed mortgage rate climbed to 5.57%, up from 5.52%.
Moneyfacts said these increases mark the biggest single-day jumps for two-year and five-year fixed mortgage rates since April and March respectively.
The latest rises come after mortgage rates had shown signs of easing in recent weeks following earlier market disruption caused by global events. However, a number of lenders have started increasing their rates again as borrowing costs rise.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said borrowers would be disappointed to see rates moving upwards again, but the changes highlight how quickly mortgage pricing can react to wider economic and geopolitical uncertainty.
She explained that rising swap rates, which influence how lenders price fixed mortgage deals, have encouraged providers to adjust their products.
Until markets become more stable, mortgage rates could remain unpredictable, making it harder for buyers and homeowners looking to remortgage to plan ahead.
Lenders Begin Adjusting Mortgage Deals
Adam French, head of consumer finance at Moneyfactscompare.co.uk, said at least 25 lenders had increased selected mortgage rates over the previous week, while only a small number had reduced their products.
Major lenders, including HSBC, Barclays, Nationwide Building Society, Lloyds Banking Group and NatWest, were among those making adjustments.
Higher funding costs have forced lenders to review pricing, even though the Bank of England has not made any changes to the base rate.
French warned that borrowers should not assume mortgage rates will continue moving in one direction, as inflation pressures, global uncertainty and changing market expectations can quickly affect borrowing costs.
Despite the recent increases, competition between lenders remains strong, meaning borrowers still have options available. However, experts are encouraging buyers and homeowners to seek advice and review their choices carefully before committing to a deal.
Mortgage Market Remains Sensitive to Global Events
The latest movement follows a period of falling mortgage rates, with lenders previously reducing prices as market conditions improved.
However, renewed uncertainty has disrupted the downward trend, showing how sensitive fixed mortgage pricing remains to wider financial conditions.
Experts say that while lower rates would help improve affordability and support activity in the housing market, future changes will depend heavily on inflation figures, Bank of England decisions and the overall economic outlook.
For homeowners approaching the end of their current mortgage deal, the recent volatility serves as a reminder that securing a competitive rate early could help protect against further increases.
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