Nationally, HSBC and Halifax both announced they would raise mortgage rates at the start of the week, and today Barclays and Santander followed suit.
Barclays’ increases, which come into force tomorrow (Wednesday 16 September), mean many products are now over 5% leaving fewer options for borrowers below that rate.
But with the likes of HSBC and TSB also making further rate cuts, the average market interest rate is rising just days before the Bank of England announces its latest interest rate decision.
Today, the typical two-year mortgage rate is 5.73% compared to 5.63% in August, according to Moneyfactscompare.co.uk.
Meanwhile, the Bank of England is expected to do so Maintain interest rates on Thursday and raised it by 0.25% in November.
Mortgage rates have been rising since the beginning of March when the conflict in Iran began. Although they have declined since then, recent renewed tensions in the Middle East have sent oil prices soaring, putting pressure on mortgage lenders to raise rates.
According to Moneyfactscompare.co.uk, since the start of March 2026, the average two-year fixed mortgage rate has risen by 0.89%. This added £131 to your monthly mortgage repayments, or £1,572 a year, based on a rate of 4.84%, rising to 5.73% – borrowing £250,000 over 25 years.
Who will the recent mortgage rate hike affect most?
Anyone due to remortgage or take out a new mortgage deal will be affected by these recent price rises.
For those remortgaging, the impact of this week’s rises will come as the biggest shock, especially for those who got out of five-year deals, which were locked in when mortgage interest rates were at their lowest.
There are 750,000 households currently on mortgages at interest rates below 3% and their deals are due to expire this year, according to the Bank of England.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “Mortgage pain shows no sign of easing for borrowers who cannot yet secure a new deal, especially those who have a five-year fixed loan and are not due to refinance until 2027.”
“In February 2022, there were fixed mortgages at less than 2%, so a decline in that rate would be a big shock to borrowers.”
What to do if you’re due to remortgage soon?
With lenders influenced by rising swap rates when setting their rates, anyone taking out a mortgage in the next few months will no doubt be wondering what to do next.
“This is really bad news for borrowers and feels like the mortgage market has entered a new and more uncertain phase,” Ranald Mitchell, director of bad credit mortgage specialist Charwin Mortgages, told Newspage.
“When Nationwide, HSBC and Halifax all move interest rates higher at the same time, it’s a very clear signal about the direction of travel. The era of confidently expecting mortgage rates to continue falling has come to an end, at least for now.”
What is his advice for those who want to get a mortgage? “Waiting for a better price may now be an expensive gamble,” he said.
“Secure something, keep reviewing the market and switch if a better deal comes up before you’re done.”
