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Mortgage Turbulence Returns: UK Lenders Hike Rates as U.S. Costs Tick Up After Iran Shock

Oil‑fueled inflation worries are lifting funding benchmarks, forcing banks to reprice mortgages.

Overview

  • Moneyfacts said UK averages climbed, with the two‑year fixed rising to 4.93% and the five‑year to 5.03% on March 10 after widespread product withdrawals and repricing.
  • Major UK lenders moved in quick succession: Barclays and Halifax raised pricing effective Tuesday, while HSBC, NatWest and Nationwide increased rates late last week and Santander and TSB flagged further rises.
  • Several providers paused sales to reprice, including Cumberland Building Society, Saffron Building Society and Fleet Mortgages, reflecting sharp moves in swap and gilt yields.
  • Market reaction to the Iran conflict pushed oil prices higher and revived inflation concerns, driving up UK gilt yields and swaps that underpin fixed‑rate funding.
  • In the U.S., 30‑year mortgage rates that dipped to 5.98% in late February have edged higher again to around 6% as rate‑cut odds for March remain low, according to CME FedWatch.