NATIONWIDE is increasing mortgage rates by up to 0.25% amid the Middle East war as brokers said “Thursday brings more bad news for borrowers”.
From tomorrow, Friday 6 March, Nationwide is increasing selected fixed rates by up to 0.25%.
This includes rates across its First Time Buyer, Home Mover, Existing Customers Moving Home and Remortgage products. Plus, its Switcher and Additional Borrowing ranges.
This comes as it was confirmed that HSBC and Coventry Building Society have also announced they are increasing residential and buy-to-let fixed rates from Friday and Monday respectively, as swap rates continue to rise on the back of inflationary concerns due to events in the Middle East.
While swaps, which determine the pricing of fixed rate mortgages, settled slightly on Wednesday, Thursday saw them head north again, with the 2-year swap as of this afternoon up 7.5 basis points (bps) to 3.56% and the 5-year swap up 7.9 bps to 3.70%.
Brokers said rising rates is bad news for borrowers and rising inflation, due to the US and Israel’s attacks on Iran, could mean that rates keep going up.
Bad news for borrowers
Babek Ismayil, CEO at homebuying platform OneDome, said: “Seeing three big lenders increase rates in a day is not the news borrowers want to see. Markets are pricing in the fact that the conflict in the Middle East could prove inflationary, which could mean the Bank of England rate cuts many were expecting will not materialise for the time being.
“Once again, this rapid repricing highlights how fast the mortgage market can move and why there are no guarantees rates will only go in one direction.”
Adam Stiles, Managing Director at London-based Helix Financial Partners, said we should expect more lenders to raise rates.
He added: “It’s now crystal clear that the events of the past week have spooked the markets, which has created a lot of volatility and driven increases in swap rates, which are used to price fixed rate mortgages.
“We are seeing lots of lenders increase and expect more to come until the dust settles, although there is little clarity on that front.”
Markets react very quickly
Zaman Sheikh, Director of Northwood Chelmsford and WN properties estate and lettings agents in Shenfield and Chelmsford, said the market is now ruled by uncertainty.
He continued: “The property market has been really active in 2026 to date and while mortgage rates are moving up on the back of what’s unfolding in the Middle East, it’s too early to say this is the beginning of a major pricing reset.
“Rates are still competitive and demand remains strong, but clearly there is a lot of uncertainty in the lending community at present.”
Mike Staton, Director at Mansfield-based Staton Mortgages, said war is hitting Brits in their pockets.
He added: “Though not welcome, these cuts from Nationwide shouldn’t come as a surprise to anyone. Markets react very quickly and Nationwide, HSBC and Coventry are likely the first of a deluge of lenders who will increase rates over the next few days.
“Due to the conflict in the Middle East, oil prices will rise, gas prices will rise and that will push inflation back up, meaning the Bank of England will hold the base rate as it is. Reflecting the nerves in the market, UK swap rates sit at a 30-day high.
“This is how a war thousands of miles away affects your monthly mortgage payments and your pocket. Under Keir Starmer and Rachel Reeves, businesses are being taxed harder, growth is stalling and confidence in the UK economy is fragile, so when something like the war with Iran happens, UK homeowners get caught in the crossfire.”
A clear signal of impending across-the-board increases
Katy Eatenton, Mortgage & Protection Specialist at St Albans-based Lifetime Wealth Management, said other lenders are now expected to raise their rates too.
She continued: “Nationwide has today followed HSBC and Coventry in announcing rate cuts, and increases of up to 0.25% are not significant. Other lenders are likely to now follow suit, as markets price in the prospect of higher inflation due to events in the Middle East.
“Just as the property and mortgage market was gaining momentum, the outlook has now changed dramatically.”
Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, advised borrowers to shop around for the best deals.
He said: “Expected increases given that one or two high street lenders have already been forced to change rates in the wake of the Middle East war. Others will inevitably follow over the next few days, as lenders are unlikely to want to be ‘the cheapest’ in this kind of environment.
“Shopping around is essential, and using a mortgage broker is vital to finding the right deal and what you qualify for, too. Nationwide does allow for product reservations in advance of any full application, which is a great opportunity. Your rate is not secured until you have provided all documents and completed a full application, so be document-ready and able to respond to your broker quickly.”
Daniel Hobbs, CEO at Rayleigh-based New Leaf Distribution, said there are genuine concerns for inflation going up again in the UK.
He added: “Thursday has brought bad news for borrowers, with three major lenders now hiking rates. Events in the Middle East are creating a lot of uncertainty and creating genuine concerns about inflation. The Bank of England’s confident forecasts about the direction of inflation have not aged well at all.”
Are we in a flurry of rises?
Richard Davidson, Mortgage Advisor at onlinemortgageadvisor.co.uk, said it’s not clear if this is a minor wobble or a deeper setback.
He continued: “Nationwide’s rate hikes should be viewed as a clear signal of impending across-the-board increases from other lenders. It remains uncertain whether this is a deeper setback or a minor wobble caused by market volatility.
“At present, this appears to be cautious repricing in the face of the unknown rather than a definitive statement on future direction, though the situation in Iran has undoubtedly heightened uncertainty. That said, rates remain at recent lows; there is currently no evidence of panic or a sustained upward trend in mortgage rates.”
Wesley Davidson, Director at Bristol-based FD Commercial, urged people not to panic.
He said: “Nationwide’s rate rises tomorrow are part of a wider pattern we’ve been watching for a few weeks now. Several lenders have nudged rates upward, and Nationwide is the latest to follow. Swap rates are the driver here. Markets have repriced expectations around when the Bank of England will cut, and that feeds directly into fixed rate pricing.
“Geopolitical uncertainty, including the Middle East situation, adds volatility to the broader picture, but swap rate movement is the more immediate mechanism lenders are responding to. Are we in a flurry of rises? It feels that way, but I’d caution against panic. Rates remain materially lower than the peaks of 2023.
“What we’re seeing is a correction from the competitive pricing war lenders were running through late 2024 and into early 2025. The weeks ahead: more of the same until swap rates stabilise. If inflation data comes in soft and the Bank signals cuts are back on the table, we could see rates ease again by the second quarter of the year.”
Photo by Bekky Bekks on Unsplash.
