Mortgage costs have risen to the highest level since August, risking a £500 annual hit for borrowers, as a spike in borrowing costs feeds through to housing.
The average rate for a two-year fixed mortgage stands at 5.31%, a slight increase from the previous 5.06%, while five-year fixed deals average 5.24%, higher than the previous 5.09%, according to data from Uswitch. Rates weren't this high since last August, with the gap between the most popular rates closing in.
Bloomberg Economics estimate that this will cost those who are re-mortgaging their home loans this year an additional £500 on average.
Barclays is the latest major lender to announce an increase in mortgage deals, following Santander, HSBC, TSB and Leeds Building Society, which all announced they were increasing costs on their home loan deals.
Justin Moy, managing director at broker EHF Mortgages, said: "Barclays is one of the last lenders to increase rates in light of recent swap rate trends, which aligns them with many of their high-street peers,' he said.
"The government needs to intervene to bring the cost of borrowing down before we head into a messy recession in the months to come."
Also, Nationwide is increasing the sole applicant minimum income from £35,000 to £40,000 on its Helping Hand mortgages, as part of changes to terms and conditions.
Nationwide describes the popular mortgage as being "to help those who don’t think they can borrow enough to buy their first home".
HSBC mortgage rates
HSBC (HSBA.L) has a 4.19% rate for a five-year deal. This is higher than the previous 4.09%. For those who have a Premier Standard account with the lender, this rate comes in at 4.16%.
Looking at the two-year options, the lowest rate stands at 4.30% with a £999 fee, again higher than the previous 4.20%.
Both cases assume a 60% loan-to-value (LTV) mortgage, meaning buyers need to have at least 40% for a deposit.
HSBC offers 95% LTV deals, meaning you only need to save for a 5% deposit. The rates are much higher, however, with a two-year fix coming in at 5.69% or 5.29% for a five-year fix.
This is because the rate someone can get will be determined by their financial situation and the size of their deposit. The larger the deposit, the lower the LTV, allowing buyers to access better deals because lenders consider them less risky.
NatWest mortgage rates
NatWest (NWG.L) is offering 4.07% for a five-year deal with a £1,495 fee, unchanged from last week.
For a two-year fix, the cheapest deal comes in at 4.27%, also unchanged. In both cases, you'll need at least a 40% deposit to qualify for the rates.
Santander mortgage rates
At Santander (BNC.L), a five-year fix comes in at 4.18% with a £999 fee, assuming you have a 40% deposit — higher than the 5.14% from the previous week.
For a two-year deal, the cheapest customers can get is 4.33% with the same £999 fee, which is also higher than the previous 5.21%.
Barclays mortgage rates
A five-year fix at Barclays (BARC.L) now comes in at 4.31%, higher than the previous 4.11%.
When it comes to two-year mortgage deals, the lowest you can get is 4.43%, also higher than the previous 4.23%. On a £200,000 mortgage being repaid over 25 years, that's the difference between paying £1,081 a month and £1,104 a month.
Nationwide mortgage rates
Nationwide (NBS.L) is offering a five-year fix at 4.19%, which comes with a £999 fee and requires a 40% deposit. This is the same as the previous deal.
Nationwide offers a two-year fixed rate for home purchase at 4.34% with a £999 fee — also for borrowers with a 40% deposit. Again, unchanged from the previous week.
Halifax mortgage rates
Halifax, the UK’s biggest mortgage lender, offers a five-year rate for 4.12% (also 60% LTV), which is unchanged from the previous week.
The lender, owned by Lloyds (LLOY.L) has a two-year fixed rate deal coming in at 4.23%, with a £999 fee for first-time buyers, which is also the same as before.
It also offers a 10-year deal with a mortgage rate of 4.58%.
The lender has announced the launch of a new 1.5-year fixed-rate remortgage product in response to growing demand among borrowers for shorter-term deals.
Shorter-term fixes offer certainty over monthly payments while also allowing households to switch to a new deal sooner to capitalise on lower rates.
Cheapest mortgage deal on the market
With mortgages below 4% no longer on the market, prospective homeowners are back to limited choices when it comes to finding a good deal.
NatWest has the cheapest deal on the market. However, its 4.07% offer requires a 40% deposit, so you will need a hefty amount of cash upfront to secure the deal. HSBC is close behind, offering a 4.09% deal for a five-year fix.
Given the average UK house price sits at £366,189, a 40% deposit equates to about £147,000.
A growing number of homeowners in the UK are opting for 35-year or longer mortgage terms, with a significant rise in older borrowers stretching their repayment periods well into their 70s.
Lender April Mortgages is offering buyers the chance to borrow up to six times their income on loans fixed for five to 15 years, from a deposit of 5%. Both those buying alone and those buying with others can apply for the mortgage.
The company, which is part of an independent Dutch asset manager DMFCO, has interest rates starting at 5.20%, with an application fee of £195.
Skipton Building Society has also said it would allow first-time buyers to borrow up to 5.5 times their income, in an effort to support more borrowers on to the housing ladder.
Leeds Building Society is increasing the maximum amount that first-time buyers can potentially borrow as a multiple of their earnings, with the launch of a new mortgage range. Aspiring homeowners with a minimum household income of £40,000 may now be able to borrow up to 5.5 times their earnings.
Mortgage holders and borrowers have faced record-high repayments in recent years, as the Bank of England's increased base rate has been passed on by banks and building societies. Until now, the general expectation has been that interest rates have reached their peak.
With 1.8 million fixed mortgage deals set to end in 2025, according to UK Finance, many homeowners will be hoping the Bank of England acts quickly to cut rates more aggressively. At the same time, savers will likely be rooting for rates to remain at or near their current levels.
