BARCLAYS is following HSBC and Nationwide in increasing its mortgage rates for fixed residential purchases and remortgages up to 0.15% with experts saying it’s “another clear setback for borrowers”.
Barclays is the latest high street lender to announce it is increasing mortgage rates, following HSBC yesterday raising deals by up to 0.10% and Nationwide increasing rates by up to 0.19% on Monday.
Residential purchase and remortgage rates have been increased by up to 0.15% by Barclays.
Its 4.00% five-year fixed remortgage product at 60% loan to value (LTV), with a minimum loan of £50k and a maximum loan of £2m, will increase to 4.15%.
Its purchase only deals include a 3.79% five-year fixed £899 product at 60% LTV, with a minimum loan of £5k and maximum loan of £2m, increasing to 3.90%.
While its 3.77% two-year fixed product at 60% LTV, with a minimum loan of £5k and maximum loan of £2m, will increase to 3.85%.
Brokers said rates are going up because SONIA swaps are up from where they were on 2 January and inflation is up to 3.4% in December from 3.2% in November.
Perfect storm
Jonathan Alvarez Herrera, Mortgage Consultant at Ayla Mortgages, said the downward momentum of rates has now stalled.
He added: “Barclays’ decision to increase mortgage rates across fixed residential purchases and remortgages is a clear sign that the recent downward momentum in pricing has stalled. While borrowers have enjoyed improved fixed-rate deals in recent months, this latest repricing suggests lenders are reacting to higher funding costs and shifting market expectations.
“Barclays is not acting alone. The move follows similar increases from HSBC and Nationwide, reinforcing the view that lenders are adjusting to the same market pressures rather than making isolated pricing decisions. It could also be seen as a correction after the sharp reductions in the final quarter of 2025, when lenders cut rates aggressively to win market share.
“With swap rates edging higher again, lenders are now rebuilding margins. This repricing also hints that markets expect the Bank of England to remain cautious, with tomorrow’s base rate decision likely to be a hold and future cuts potentially slower than previously hoped.”
Elliott Culley, Director at Switch Mortgage Finance, said sticky inflation is to blame for rising rates.
He continued: “Barclays increasing their rates for their lower LTV products is a blow to the mortgage market, but not unexpected, as mortgage lenders err on the side of caution with the Bank of England meeting tomorrow and a cooling of any base rate reductions for the next couple of months or so.
“Higher than expected inflation figures were the main instigator for the rate rises we have seen from many mortgage lenders recently. If inflation can be tamed, I would expect the latest rate increases to be short lived, but right now lenders are not sure what to expect and will increase rates accordingly.”
Another blow for borrowers
Katy Eatenton, Mortgage & Protection Specialist at Lifetime Wealth Management, said borrowers should not take a downward trend in rates for granted.
She added: “Another blow for borrowers as Barclays becomes the latest high street lender to increase rates. Barclays repricing upwards, following HSBC and Nationwide earlier in the week, shows how quickly things can turn. In the current climate, where one economic data set can influence markets in an instant, borrowers should take nothing for granted.
“Inflation rising and the fact we may not get as many cuts from the Bank of England this year as hoped means rates are edging up. The hope is that inflation starts to play ball again, and soon.”
Samuel Mather-Holgate, Managing Director & IFA at Mather and Murray Financial, said it reflects badly on Labour.
He continued: “Lenders are doing the Hokey Cokey at the moment with some reducing and some increasing rates. This week has seen several major lenders hike their interest rates as economists consider how quickly inflation will come down and how quickly the central bank will cut interest rates as a result.
“All in all, it’s an indictment on the economy and Labour’s fiscal reputation that rates are heading northwards again.”
We can only hope that this is a blip
Riz Malik, Director at R3 Wealth, said nearly two million people are coming off their fixed rates this year.
He added: “For the 1.8 million mortgages that are due to mature this year, it is important not to think that rates will continue to fall in a straight line. If your deal is ending this year, speak to a broker who can guide you through the process. They can also keep an eye out if things improve something your own lender won’t necessarily do.”
Darryl Dhoffer, Founder at The Mortgage Geezer, said it was a “perfect storm”.
He continued: “A perfect storm is driving Barclays’ rate hike. Funding costs are up, with SONIA swaps rising since Jan 2nd and inflation hitting 3.4% in Dec.
“Add in the volatility of Trump’s ‘on-off’ tariff stance and falling gold/silver prices, plus a ‘baked-in’ hold from the BoE tomorrow, and the result is inevitable – lenders are pricing in higher rates.”
Andrew Montlake, CEO at Coreco, said he hopes rising rates are a “blip”.
He added: “Barclays follows HSBC and Nationwide in increasing rates in what is another clear setback for borrowers. Other lenders may well follow in the days ahead. Swap rates increasing means mortgages get more expensive for borrowers.
“We can only hope that this is a blip rather than the beginning of a longer term trend. The next set of inflation data will be key to the direction of travel for mortgage rates.”
