This week some of the UK’s biggest lenders including Barclays, NatWest, HSBC, Halifax and Nationwide have announced rate hikes of up to 0.20% across their fixed-rate mortgages.
Mortgage rates had been falling up until two weeks’ ago, with lenders getting competitive with pricing and jostling for position in what some brokers were describing as a price war.
But following the escalation of the conflict in Iran, which has driven up oil prices again, the threat of higher inflation has sent costs upwards for lenders and they have, in response, raised rates.
How much have mortgage rates increased?
The first round of price increases was announced last week and more lenders have come forward this week with rate hikes.
The announcements keep coming – just this morning (Friday 24 July) HSBC announced it was making ‘a number of increases’ across its residential and buy-to-let mortgage rates on Monday 27 July.
In the last week the Moneyfacts Average Mortgage Rate his shifted up from 5.45% on Thursday 16 July to 5.54% at the end of the day yesterday.
Meanwhile, typical two- and five-year new mortgage rates are at their highest in over a month, according to Moneyfacts.
The two-year, which is averaging 5.59%, was last this high on 19 June and the five-year was last at 5.61% on the 7 June.
These rates stood at 4.84% and 4.96% respectively on 1 March 2026 before the conflict in Iran began and prices soared by over 1% on average.
In terms of how much these rises could add to your mortgage, Nicholas Mendes, mortgage technical manager at John Charcol, explained on a typical £200,000 mortgage over 25 years a 0.20% rate hike would around £23 a month, or roughly £276 a year.
On a £300,000 mortgage the same increase adds closer to £35 a month, nearly £420 a year.
Whilst he said this was not a dramatic jump on its own, if lenders begin making more cuts – as some have this week – each one stacks on the last for anyone still shopping around.
Who will the mortgage price hikes impact?
The price hikes, which apply largely to fixed rate mortgages, will impact anyone who is about to take out a mortgage. This includes first-time buyers and movers as well as anyone whose current deal is coming to an end.
If you have less than six months left on your deal, it could be a good idea to look for a new product now before prices rise further.
The Bank of England is due to announce its next interest rate decision on Thursday next week (30 July). And while this won’t impact fixed-rate pricing, those on tracker or variable mortgages will be eagerly awaiting the news in the hope the decision makers hold the Base Rate rather than making a hike.
What should you do if you are about to take out a mortgage?
The advice from all brokers we are hearing from at the moment is move quickly. If your deal is due to expire in less than six months, it could be worth fixing soon before the market changes more.
Rachel Geddes, strategic lender relationship director at Mortgage Advice Bureau, said: “Anyone coming to the end of a fixed deal should be reviewing their options now rather than waiting for it to expire, since most lenders let you secure a new rate months in advance and switch to something cheaper later if pricing improves.
“None of this should mean pressing pause on plans. Rates are still well below the peaks seen earlier this year, and lenders have shown all year that they’re quick to bring pricing back down once costs settle.
“The sensible approach is the same as always: act on expert mortgage advice now, rather than trying to time the market.”
She warned first-time buyers were typically the most exposed to these price hikes, since they’re often borrowing at higher loan-to-values where pricing is most sensitive.
“If you’re mid-way through securing a mortgage,” she added, “don’t assume the rate you were quoted last week still stands – get it locked in as soon as you can.”