Another second wave of mortgage rate hikes has pushed borrowing costs higher, ahead of tomorrow’s base rate vote by the Bank of England.
Analysis by Moneyfactscompare shows hikes have been made by the major banks, off the back of higher swap rates, including NatWest, Santander, HSBC, Lloyds Bank and TSB, all for the second time since the start of September.
Since the start of March 2026, the average two-year fixed mortgage rate has risen by 0.89%, adding £131 to monthly mortgage repayments, or £1,572 per year, based on a rate of 4.84%, rising to 5.73% – borrowing £250,000 over 25 years.
Moneyfactscompare finance expert Rachel Springall says: “Swap rates have climbed above 4.70% … It is highly likely other lenders will follow suit to adjust rates, and with some deals withdrawn from the market, it is expected any returning deals could well be priced higher.
“Several building societies have also started to price for a second time this week, such as Nationwide, and others have withdrawn and replaced products.
“The average two-year fixed mortgage rate is at its highest point since June, with the average five-year fixed back up to levels not seen since April. This will be hugely disappointing news for borrowers.
“It demonstrates how fixed mortgage rates are not intrinsically linked to adjustments to the Bank of England Base Rate (BBR), yet mortgage rates could climb even higher if the Monetary Policy Committee (MPC) decide to increase the rate [tomorrow].”
Economists expect a hold this week, and a rise of 0.25% in November.
There is also speculation that four out of the five policy decisions between February and July 2027 will see base rate hikes.
The total cumulative increase of five rises would add 1.25% by the end of July 2027, with base rate rising from 3.75% to 5.00%.
This article is taken from Landlord Today