Trio of Big Six lenders hike mortgage rates as Iran conflict continues

NatWest is the latest major mortgage lender to announce increases to its mortgage range, following recent rises by Barclays, Nationwide, Coventry and Virgin Money.

NatWest is set to increase fixed rates by up to 0.27% from tomorrow.

Nationwide has increased fixed and tracker rates by up to 0.35% this week across its first-time buyer, homemover, existing customers moving home and remortgage products.

Barclays has increased residential rates by up to 0.34%, with the biggest increases across residential rates within its existing customer range.

Virgin Money has also increased purchase and remortgage rates by up to 0.35%, while Coventry Building Society has announced rate hikes across residential and buy-to-let rates for both new and existing customers.

David Hollingworth, associate director at L&C Mortgages, commented: “The story for mortgage rates in recent weeks has generally been positive, as cuts to fixed rates have dragged the market in a positive direction.

“However, any borrower hoping for rate cuts to become an ongoing trend will need to rethink, as a growing number of lenders have announced impending hikes to fixed deals in the coming days.

“The resumption of hostility in the Middle East has caused further uncertainty in financial markets, as the threat of higher interest rates returns. That’s affecting lenders’ funding costs and has already resulted in several major lenders announcing that they have increased fixed rates or are about to.

“Several moves in quick succession is usually a signal that others will not be far behind. Borrowers that had been holding on in the hope of further reductions improving their rate choice may now need to hurry if they want to avoid missing out on some of the lowest rates.

“Although many increases have so far been slight, others are chunkier. For example, Nationwide’s leading two-year fix for purchases at 4.24% has now lifted to 4.59%, an increase of 0.35% equating to an uplift in monthly payments of almost £40pm or £480 per annum.

“Things can change quickly but securing a rate now could avoid being hit with further rises while still allowing a further review of rates before completion if the situation eases back again.”