Mortgage borrowers face a fresh round of rate increases as major lenders respond to rising swap rates.
HSBC, Barclays and NatWest are among the biggest banks to increase mortgage rates since the start of September, according to Moneyfactscompare.co.uk.
More lenders are likely to follow in the coming days. Banks and building societies are reviewing their pricing as funding costs rise.
The prospect of higher mortgage rates could put further pressure on buyer affordability. It also comes as estate agents look to the autumn market for stronger activity.
Even modest increases could have a noticeable impact on borrowers.
Moneyfacts calculates that a 0.25 percentage point rise on a £250,000 mortgage would add around £38 to monthly repayments. That equates to an extra £456 a year on a 25-year mortgage.
The calculation assumes a typical two-year fixed rate increases from 5.63% to 5.88%.
More lenders likely to reprice
Lenders closely watch swap rates when pricing fixed-rate mortgages. As a result, recent increases are putting pressure on them to adjust their rates.
Earlier this year, the major high street banks priced their cheapest deals around 0.29 percentage points above the two-year swap rate. These included Barclays, HSBC, Lloyds Bank, NatWest and Santander.
However, lenders have so far responded more cautiously than they did during the disruption in March.
Only a small number have withdrawn fixed-rate mortgages since the beginning of September. Family Building Society is among those to have temporarily pulled products.
By contrast, numerous lenders withdrew or rapidly repriced deals in March 2026. Swap rates had surged following the outbreak of conflict in the Middle East.
Estate agents will therefore be watching the direction of mortgage pricing closely. Higher rates can reduce buyer borrowing power and affordability.
In turn, that could affect budgets, transaction volumes and the ability of buyers to progress agreed sales.
Rachel Springall, finance commentator at Moneyfactscompare.co.uk, said: “The pricing margins among major lenders are under pressure due to renewed volatility in the swap rate market, so it is somewhat inevitable for them to adjust rates. Major lenders, which include HSBC and NatWest, have increased rates since the start of September. 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.
“Swap rates are much higher than they were a month ago and are a key influence on how lenders price their fixed-rate mortgages. Lenders look at margins very carefully, so it would be unwise to price their deals too low, if the expectations are for interest rates to rise, even if over the short-term.
“Mortgage rates are rising due to the escalating military conflict between the US and Iran, reigniting inflationary fears. The UK 10-year gilt yield has also risen further above 5% to an 18-year high recently due to a global bond sell-off, adding further pressure to the wholesale funding costs that underpin fixed mortgage pricing. However, the hit to the mortgage market over recent days pales in comparison to when the conflict in the Middle East began around six months ago, when many lenders pulled fixed rate deals.
“While this alone might still not reassure some borrowers, it is worth noting that the pressure on swap rates over the past six months has not been caused by UK fiscal policy, which is why withdrawals and rate hikes are nowhere near the scale experienced in the aftermath of the ‘mini-Budget’ in 2022.
“Borrowers expecting mortgages rates to drop in the coming weeks have had their hopes dashed.”
