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2h ago

UK Lenders Lift Mortgage Rates, Pull Deals as Oil Shock Pushes Up Funding Costs

Surging energy prices plus higher gilt and swap yields have lifted lenders’ funding costs, prompting rapid repricing with some temporary product withdrawals.

Workers construct new homes in a development on June 25, 2024, in Loveland, Colorado.
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Overview

  • Moneyfacts reported the average two-year fixed at 4.87% and the five-year at 4.98% on Monday, both up since Friday.
  • Barclays will raise selected residential purchase and remortgage rates from Tuesday, with Halifax and Lloyds also increasing fixed and tracker products the same day and Santander set to lift rates on Wednesday.
  • HSBC, NatWest, Nationwide, TSB, Virgin Money and Gen H have already moved prices higher, while Cumberland Building Society, Saffron Building Society and Fleet Mortgages temporarily withdrew products to reprice.
  • Analysts cite the Iran conflict and oil above $100 as drivers of higher inflation expectations, pushing gilt and swap rates up; the UK 10‑year gilt was around 4.65% on Monday after an early jump.
  • In the U.S., mortgage rates briefly dipped to 5.98% in late February before rebounding to roughly 6% as volatility returned, with a weaker February jobs report (net −92,000) not offsetting inflation concerns or shifting expectations for near‑term Fed cuts.