Barclays has become the latest high street lender to increase mortgage rates, raising the cost of fixed-rate residential purchases and remortgages by up to 0.15 per cent in what brokers describe as another setback for borrowers.
The move follows similar repricing by HSBC, which lifted rates by up to 0.10 per cent earlier this week, and Nationwide, which increased selected deals by as much as 0.19 per cent on Monday. Together, the changes suggest a shift in momentum after several months of falling mortgage rates.
Barclays’ increases affect both purchase and remortgage products across its fixed-rate range. Its five-year fixed remortgage deal at 60 per cent loan-to-value, previously priced at 4.00 per cent, will rise to 4.15 per cent. The product is available for loans between £50,000 and £2 million.
On the purchase side, Barclays’ five-year fixed deal at 60 per cent LTV with an £899 fee will increase from 3.79 per cent to 3.90 per cent, while its two-year fixed equivalent will rise from 3.77 per cent to 3.85 per cent.
Mortgage brokers say the increases reflect a combination of rising wholesale funding costs and renewed inflationary pressure. SONIA swap rates, which underpin many fixed mortgage deals, have moved higher since early January, while UK inflation rose to 3.4 per cent in December from 3.2 per cent the previous month.
Jonathan Alvarez Herrera, mortgage consultant at Ayla Mortgages, said the latest move indicates that the recent downward trend in mortgage pricing has stalled. He said lenders appear to be responding to higher funding costs and shifting market expectations rather than acting in isolation, adding that Barclays’ repricing follows aggressive rate cuts made late last year to win market share.
Others point to caution ahead of the Bank of England’s next interest rate decision. With markets widely expecting policymakers to hold the base rate and slow the pace of future cuts, lenders are rebuilding margins to reflect a more uncertain outlook.
Elliott Culley, director at Switch Mortgage Finance, said the rise in inflation had been a key trigger for the recent wave of rate increases. He added that while the changes were disappointing for borrowers, they were not unexpected given the current economic backdrop and the central bank’s cautious stance.
Katy Eatenton, mortgage and protection specialist at Lifetime Wealth Management, warned borrowers not to assume rates would continue to fall in a straight line. She said the speed at which lenders had repriced upwards demonstrated how quickly market sentiment can change when inflation data and funding costs move against expectations.
For homeowners coming to the end of fixed-rate deals this year, advisers stress the importance of planning ahead. Around 1.8 million mortgages are due to mature in 2026, and brokers say borrowers should take advice early rather than relying on rates to improve automatically.
Andrew Montlake, chief executive of Coreco, said the industry was hoping the recent increases prove to be a temporary blip rather than the start of a sustained upward trend. He added that the next inflation reading would be crucial in determining whether lenders continue to push rates higher or regain confidence to cut again later in the year.
