Nationwide hikes mortgage rates alongside two more high street banks

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Homeowners have been dealt a further blow today as three more major high street lenders announced mortgage rate increases.  

Nationwide is increasing a number of its fixed and tracker rates by up to 0.3 percentage points, while Halifax is also upping rates across all its fixed rate products tomorrow.

Nationwide's hikes will see its lowest two-year fix rise from 4.2 per cent to 4.5 per cent with a £1499 fee attached.

Its lowest five-year fix will rise from 4.45 per cent to 4.65 per cent, again with a £1,499 fee attached.

On a £200,000 mortgage being repaid over 25 years, that's the difference between paying £1,106 a month and £1,129 a month.

It follows HSBC, which put up its mortgage rates today, including the market's cheapest two-year fix which had been at 4.01 per cent.

Borrowers have been dealt another blow, as two major high street lenders announced further mortgage rate increases early Monday afternoon

The changes will negatively impact both home buyers and anyone looking to remortgage.

There are 1.8million households due to remortgage this year, according to UK Finance, many of which are rolling off super-low rates taken out five years ago.

Since the start of the conflict in Iran, the cheapest two fixed rate deals have risen from around 3.5 per cent to 4.15 per cent while the lowest five-year fixes have gone up by a similar margin.

According to rates scrutineer Moneyfacts, the cheapest two-year fix has risen from 4.83 per cent at the start of March to 5.43 per cent today, the highest level since February 2025.

Aaron Strutt of mortgage broker Trinity Financial. 'The rate changes are still coming through thick and fast.

'Some lenders are pulling their entire mortgage ranges while they try to price their products, citing extreme market volatility.

'For the moment, lenders like Barclays, TSB and NatWest have two-year fixes priced around 4.3 per cent, and HSBC and NatWest have five-year fixes priced around 4.5 per cent.' 

Why are mortgage rates rising? 

Fixed rate mortgage pricing is largely based on Sonia swap rates - the inter-bank lending rate, which is based on future interest rate expectations.

When Sonia swaps rise sufficiently it often results in fixed mortgage rates going up, and vice versa when they fall.

Similar to gilt yields, Sonia swap rates have spiked upwards since the conflict in the Middle East began with fears over an energy price spike and inflation causing money markets to go into a spin.

Traders have gone from betting on two interest rate cuts before the war to betting on three or four interest hikes this year. 

Five-year swaps were at 4.15 per cent, up from 3.41 per cent on 27 February.  

Meanwhile, two-year swaps are currently at 4.2 per cent, up from 3.36 per cent on 27 February. 

However, they did briefly go above 4.5 per cent this morning before Donald Trump somewhat calmed markets by suggesting he has had productive conversations regarding 'a complete and total resolution of our hostilities in the Middle East.'

Rohit Kohli, director at Romsey-based The Mortgage Stop, believes mortgage rates will keep going higher until lenders have certainty.

He said: 'Rates won't settle until global uncertainty does and that uncertainty has one very large, and very loud source right now'.

'Trump's latest Iran comments may have caused a brief positive ripple, but markets have been burned before by announcements that don't hold.

'Until the chaos actually stops, lenders will keep repricing upward. Borrowers need to plan around that reality.'