BROKERS have urged borrowers to lock into mortgage rates as soon as they can, as Barclays becomes the latest high street lender to hike rates as swap rates continue to head north and traders increasingly bet on a base rate rise in 2026.
From tomorrow, Tuesday 10 March, Barclays is increasing rates on a selection of products in its residential purchase and remortgage ranges by 0.1%.
The move follows hikes by countless other lenders last week as events in the Middle East escalate and the oil price rises above $100 a barrel.
Harry Goodliffe, Director at HTG Mortgages, said: “The idea that mortgage rates this year were only heading one way has just taken another serious knock. Barclays increasing rates by 0.1% across a wide range of its products shows they are reacting to global uncertainty and rising swap rates.
“Though this doesn’t mean we are heading back to the rate shock of 2022, it does show how fragile the outlook is.”
Emma Jones, Managing Director at Runcorn-based Whenthebanksaysno.co.uk, said the news is another “blow to borrowers”.
She continued: “With traders now betting on a rate rise this year from the Bank of England to control the expected inflation caused by the soaring oil price, the outlook for the UK property and mortgage market has changed beyond recognition over the past week or so.
“The cost of living crisis could once again flare up and impact demand, just as things were starting to look a bit more positive for the property market.”
Everything turned on its head
Shaun Sturgess, Director at Swansea-based Sturgess Mortgage Solutions, said that while the increases from Barclays are smaller than those other lenders have delivered, they show that the direction of mortgage rates is now very much up.
He continued: “At the end of February there was a feel-good factor in the mortgage market, with rates edging down and the Bank of England expected to cut the base rate again as we neared the inflation target.
“Events in the Middle East have now turned everything on its head and there are genuine worries that inflation could climb materially.”
David Stirling, Independent Financial Adviser at Belfast-based Mint Wealth, described the move by Barclays as “cautious” and expects more lenders to follow suit in the days ahead.
He said: “Barclays are the first lender of the week to give borrowers the Monday blues as they nudge their rates up by 0.1%. This cautious shuffle upwards is a gentle reminder that lenders remain twitchy and that, in the modern global economy, geopolitical events can still drive the bills up on a semi in suburban Britain.
“Barclays sadly won’t be the last lender increasing this week. Rising oil prices, inflation worries and global tensions are pushing the cost of money north and other lenders will surely have to follow.”
More repricing incoming
Riz Malik, Independent Financial Adviser at Southend-on-Sea-based R3 Wealth: “It looks like the UK mortgage market continues to be impacted by the conflict in Iran, and it doesn’t look like that will be letting up anytime soon.
“Barclays won’t be the only lender looking to reprice this week, as traders are now betting on the potential for base rate increases rather than rate cuts. This is not good news for those looking to buy or for those whose deal ends in 2026.”
Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, told borrowers to act, and fast.
He said: “With ever-increasing Swap rates, it’s likely we will see another wave of mortgage rate increases by the end of the week. It’s definitely time to jump on a deal before lenders have little option but to up rates once more.”
Dariusz Karpowicz, Director at Doncaster-based Albion Financial Advice, added: “Rising oil prices, geopolitical tensions and inflation worries are all feeding into the cost of fixed-rate money, and lenders have little choice but to follow.
“Barclays won’t be the last this week. If your deal ends in 2026 or you’re buying soon, lock in now. Waiting for rates to fall further is a gamble the market is no longer offering.”
