Major UK lenders have increased mortgage rates following higher-than-expected inflation figures, reversing weeks of steady cuts.
Santander, Nationwide and Halifax have all announced price hikes in recent days, with experts warning this could be the beginning of a broader repricing across the market.
The moves come as economists revise their predictions for Bank of England interest rate cuts this year.
Nationwide is increasing its fixed rates by up to 0.25 percentage points from Friday, whilst Santander has announced rises of up to 0.1 percentage points on some deals from next Tuesday.
These changes follow Halifax, which announced on Wednesday it would increase various rates from Friday, although it has also cut some rates. The announcements mark a shift after a period when mortgage rates had been steadily falling.
Barclays has revised its interest rate forecasts following the disappointing inflation data.
The bank no longer expects the Bank of England to cut rates in June and now predicts the base rate will reach 3.5 per cent by February 2026, rather than by the end of this year as previously forecast.
Major lenders increase prices as Barclays delivers grim interest rate forecast
GETTYDespite this more cautious outlook, Barclays still anticipates quarterly rate cuts of 25 basis points in August and November.
Jack Meaning, chief UK economist at Barclays, said the inflation figure "surprised us to the upside" and that its forecast was now more in line with the Bank of England's own expectations.
Inflation jumped to 3.5 per cent in April, driven by a huge hike in household bills, according to Office for National Statistics data.
"We... do not think that a sufficient undershoot of inflation will be realised to motivate a cut in June," Meaning added.
The rising mortgage rates are directly linked to increases in swap rates, which have climbed by about 0.3 percentage points over the past couple of weeks. Two-year swaps currently stand at 3.83 per cent, while five-year swaps are at 3.86 per cent.
Swap rates are influenced by long-term market projections for the Bank of England base rate, the wider economy, internal bank targets and competitor pricing. They effectively create a benchmark indicating where the market believes interest rates will go.
Mortgage brokers are warning that the sub-4 per cent rates that have been available recently may soon disappear.
Aaron Strutt of Trinity Financial said: "The sub-4 per cent rates we have been used to seeing and borrowers like so much will almost certainly be pulled soon, given how much the cost of funding has increased."
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Mortgage brokers are warning that the sub-4 per cent rates that have been available recently may soon disappea
GETTYElliott Culley from Switch Mortgage Finance advised that if fewer interest rate cuts materialise this year, customers should "expect to see the current mortgage rates disappear very quickly."
For homebuyers, most lenders allow you to lock in a mortgage rate for a fixed period, typically between three and six months, until you complete your purchase. If your mortgage is expiring later this summer, you can secure a rate now in advance.
Katy Eatenton, mortgage and protection specialist at Lifetime Wealth Management, noted: "Although Barclays announced rate reductions today, I think the general direction of rates will be up for the immediate future."
