Five lenders have increased the price of their mortgage deals this week, including Barclays, TSB, Santander, Skipton Building Society, and Nottingham Building Society. This follows concerns about a potential Bank of England interest rate increase.
Barclays has raised rates on a range of products by nearly 0.2 per cent, with its two-year fixed rate climbing to 5.53 per cent and its five-year fix reaching 5.48 per cent. TSB has also increased a selection of residential mortgage products by 0.15 per cent.
The average five-year fixed homeowner mortgage rate has increased to 5.68 per cent from 5.64 per cent on Friday, marking its highest average since 11 May, according to Moneyfacts. The average two-year rate has also risen to 5.63 per cent from 5.6 per cent.
Volatility in the market is attributed to the re-pricing of swap rates, which are a key benchmark for fixed-rate mortgages and reflect expectations for future interest rates. These swap rates have been affected by the ongoing conflict in the Middle East, leading investors and economists to adjust inflation expectations.
Rachel Springall, a finance expert at Moneyfacts, stated that the recent uplift in swap rates has begun to impact fixed-rate mortgage pricing, with further adjustments anticipated. She added that the renewed pressure on the swap rate market made it "somewhat inevitable" for lenders to react.
The Bank of England's Monetary Policy Committee is scheduled to meet next Thursday for its next rate decision. The Bank has maintained interest rates at 3.75 per cent but has adopted a cautious stance in previous meetings.