Mortgage rates rising: Halifax, HSBC and Barclays among lenders raising deals - should homeowners fix now?

Big mortgage lenders are raising rates, dealing a blow to anyone borrowing money for a new or existing home.

Halifax, Barclays, HSBC, and TSB have all started the week by pushing up the cost of home loans.

And it’s feared more could follow.

Mortgage costs were falling at the start of the month following a ceasefire in the Middle East.

But fighting has since broken out again with US strikes on Iran.

Homebuyers will want to know if rates are set to keep rising over the summer and how high they could go.

Why are mortgage rates rising?

Mortgage lenders largely price borrowing based on financial market swap rates, as well as the Bank of England base rate.

The escalation of tensions in the Middle East has raised expectations for higher inflation and the cost of living rising over the coming months.

Interest rates tend to rise in line with inflation.

Swap rates have been rising since the Iran-US war ramped back which has increased lenders' funding costs.

As a result, banks and building societies are passing those higher costs on to borrowers by increasing mortgage rates.

Should I fix my mortgage now?

If you are coming to the end of a fixed-rate deal or home hunting, the increase in rates could feel alarming.

However, if you get a mortgage offer in place, you usually have around six months before it expires.

You can reapply for a cheaper deal if rates come down before you make a move.

If you're coming to the end of a fixed-rate mortgage, you secure a new re-mortgage rate around six months before your deal finishes so now could be a good time to see what's available.

What is the forecast for mortgage rates over 2026?

If you are closely following movement on mortgage rates, it's a good idea to keep an eye on the latest inflation figures as well as economy growth figures, as these can influence the Bank of England's next interest rate decision.

The next Bank of England rate review is on 30 July.

Remember though that mortgage deals can rise or fall even if the Bank of England leaves the base rate unchanged.

How much do rate rises add to the cost of a mortgage?

Mortgages are big amounts borrowed which means even a small movement can make a big change to bills.

Lenders this week have increased rates by up to 0.2%.

Nicholas Mendes, mortgage technical manager at broker John Charcol, said: "A 0.20% increase on a typical £200,000 mortgage over 25 years adds around £23 a month, or roughly £276 a year.

"On a £300,000 mortgage the same increase adds closer to £35 a month, nearly £420 a year."

Each small move can stack up for anyone looking for a mortgage.

A mortgage calculator - available on most lender websites - can show you how different rates change the monthly repayment on a set borrowing figure.

If you are trying to bring down monthly repayments, you can increase the term of the mortgage. However, this means you will pay more interest over the duration of the mortgage.