Lenders Hike Mortgage Rates Amid Interest Rate Fears

Five lenders have raised their mortgage rates as the threat of higher interest rates looms over the UK economy. Barclays has increased its rates on various products, with its two-year fixed rate now at 5.53 per cent and five-year fix at 5.48 per cent.

TSB, Santander, Skipton Building Society, and Nottingham Building Society have also hiked their rates by up to 0.15 per cent. The average five-year fixed homeowner mortgage rate has risen to 5.68 per cent from 5.64 per cent on Friday, while the average two-year rate jumped to 5.63 per cent from 5.6 per cent.

Financial experts say this is due to volatility in the market driven by the re-pricing of swap rates, which have been affected by the ongoing conflict in the Middle East and rising oil prices. The Bank of England has left interest rates at 3.75 per cent but some analysts predict a hike could come as soon as November.

Moneyfacts' Rachel Springall stated that 'the recent uplift in swap rates has started to filter into the pricing of fixed-rate mortgages, with more moves expected in the coming days.'