Should borrowers brace for rates skyrocketing again?
Major lenders Barclays and NatWest have announced increases to their fixed mortgage rates, joining a wave of major lenders pushing rates above the 4% mark despite last week’s Bank of England base rate cut.
Barclays’ rate adjustments take effect today, November 14, with its five-year fixed rate at 3.96% rising to 4.28%.
NatWest, which currently holds the lowest five-year fixed rate on the market, has increased its rate for homebuyers from 3.84% to 4.14%.
These changes follow similar rate hikes from other high street lenders, including Nationwide, Santander, HSBC, TSB, Coventry Building Society, and Accord Mortgages. Now, only Allied Irish Bank offers fixed mortgage rates below 4%.
David Hollingworth, associate director at L&C Mortgages, noted that the steady rate increases reflect lenders’ anticipation of a prolonged high-rate environment.
“A number of lenders managed to hold fixed rates below 4%, until now,” he said. “As sharper rates have fallen away, an air of inevitability was building and now all major UK lenders’ fixed rates have once again edged back above 4%.”
Hollingworth also cautioned borrowers not to expect dramatic increases in rates, despite the recent trend.
“The Bank of England base rate is still expected to fall over time, but markets are questioning if the pace will be as rapid,” he added. “Forecasting and perception changes frequently but for now, borrowers should grab a rate while they can, to avoid missing out if the deal is subsequently withdrawn.”
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