According to Chatham Financial, the two-year swap was 4.258% as of 22 July, up from 3.993% last month, while the five-year swap has risen from 4.034% to 4.316%.
This has resulted from the escalating conflict between the US and Iran and the closure of the Strait of Hormuz, which saw oil prices rise to $100 for the first time since May. This is expected to impact energy prices and feed through to higher inflation.
Nationwide, HSBC and Accord hike mortgage pricing
Nationwide has hiked rates across its mortgages for existing borrowers, with the two-year fixed additional borrowing product at 60% loan to value (LTV) with a £999 fee rising from 4.37% to 4.6%, and the deal at 75% LTV increasing from 4.46% to 4.68%. Pricing also rose at the 80-90% tiers and across the fee-free five-year fixed options.
Nationwide also increased its product switching rates, such as the two-year fix at 60% LTV with a £999 fee, which rose from 4.37% to 4.6%. The fee-free option increased from 4.69% to 4.87%. The mutual also increased pricing across selected three- and five-year options.
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Further, HSBC announced rate rises for the second time this week, with the incoming changes taking effect from 27 July.
Changes will impact UK residential first-time buyers and homemovers, remortgage, switching, borrowing more and rates for energy-efficient properties. HSBC will also increase buy-to-let (BTL) purchase and remortgage rates, as well as international residential and BTL deals.
Accord has also increased pricing as of 24 July, with fixed residential new business rates up to 90% LTV rising by 0.2%. There have been no changes made to pricing at 95% LTV, its £5k Deposit Mortgage or tracker rates.
For BTL new business, all rates have risen by 0.1%.
Higher rates should not make borrowers pause plans
Rachel Geddes, strategic lender relationship director at Mortgage Advice Bureau (MAB), said these increases and other changes made by lenders this month had been driven by “rising swap rates rather than any change to the Bank of England base rate, but the effect for borrowers is the same either way: mortgages are getting a little more expensive”.
Geddes said first-time buyers were typically most exposed to these changes as higher-LTV pricing was most sensitive, but for remortgagors, this would be a “nudge rather than a shock”.
She added: “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.”
Increased mortgage rates from TSB and Virgin
TSB has lifted two-year fixed residential purchase and remortgage rates by up to 0.2% as of 24 July.
Purchase pricing now starts at 4.59% for a deal at 60% LTV with a £995 fee or 4.84% with no fee, up to 5.49% at 90-95% LTV.
Similar increases have been made to two- and five-year fixed BTL remortgage rates up to 60% LTV.
Virgin Money has adjusted product transfer rates, with residential pricing going up by as much as 0.23% and BTL rates by up to 0.15%.
