Five of the big six lenders raised mortgage rates within days of each other this month, and the scale of the moves has caught even seasoned brokers off guard. Santander’s increase, effective from Wednesday, was the sharpest of the lot. Santander hiked its rates by 45bps, effective Wednesday. Aaron Strutt, product and communications director at Trinity Financial, said a price hike of 0.45% on the two-year fixes and 0.4% on the five-year fixes was going to come as a bit of a shock to customers checking Santander’s rates one day and again the next, adding he could not remember the last time five of the big six lenders hiked their rates on the same day.
The practical effect is that the very cheapest borrowing has simply vanished. The rate change meant Santander effectively pulled the last of its sub-5% rates. Within its first-time buyer range, the numbers tell their own story: the 90% loan-to-value two- and three-year fixed rate with no fee and £250 cashback was increased by 45 basis points to 5.8%, while the 95% LTV two-year fixed rate with £250 cashback rose to 6.05%. Buy-to-let landlords have not escaped either, with the highest rate, a five-year fixed with nil fee, increased by 40 basis points to 5.51%.
Nationwide followed within days. From the next day, Nationwide hiked rates across its first-time buyer, home mover, remortgage, switcher and additional borrowing ranges, with fixed rates increasing by as much as 30 basis points. Strutt said lenders are under a lot more pressure to fund their mortgages because of increases to borrowing costs. The knock-on effect for buyers is stark: first-time buyer rates now sit between 4.64% and 5.74%, while remortgage rates are nearing the 6% range. HSBC, meanwhile, is repricing from 15 September across a wide range of residential mortgage products including first-time buyer, home mover and remortgage deals, with all two- and five-year fixed rates and all two-year tracker rates rising across every LTV band, including Premier, High Value Mortgage and energy-efficient ranges, plus increases across its buy-to-let proposition.
None of this is happening in isolation. Wholesale funding costs, the swap rates that determine how lenders price fixed deals, have been climbing sharply since late summer. Five-year swap rates rose above 4.52% this week, their highest level since October 2023. Rachel Springall of Moneyfactscompare put it plainly: the pricing margins among major lenders are under pressure due to renewed volatility in the swap rate market, so it is somewhat inevitable for them to adjust rates. The two-year swap has moved just as quickly, climbing to 4.26% as of 3 September, up from 4.06% a month earlier.
For anyone trying to work out what this actually costs, Moneyfacts has done the sums. A 0.25 percentage point increase on a typical two-year fixed rate mortgage could add around £38 a month to repayments, or £456 a year, based on a rate of 5.63% rising to 5.88% on a 25-year, £250,000 mortgage. Given some of the moves seen this week run at nearly double that margin, the real-world impact on monthly budgets is considerably larger than the numbers might first suggest.
There’s a wider backdrop too. The Bank Rate has stood at 3.75%, held on 30 July 2026, with the next Monetary Policy Committee decision due on 17 September, against inflation running at 2.9% in the latest published figure, above the 2% target. Whatever that committee decides, it won’t undo the repricing already under way at HSBC, Santander and Nationwide, since fixed-rate mortgages move on swap market expectations well ahead of any base rate announcement.
Locally, brokers are already telling clients not to gamble on a better deal turning up. Stephen Perkins, managing director of Norwich-based mortgage broker Yellow Brick Mortgages, has been urging borrowers to lock in now rather than wait. He has said mortgage pricing can change quickly and that waiting in the hope of securing a slightly lower rate can sometimes have the opposite effect if market conditions move against you, describing this as the “waiting penalty”. That advice lands with particular force here. The average two-year rate has already risen to 5.29%, up from 5.22% at the start of July, and is now well above the 4.65% seen at the outset of the Iran conflict in March.
The stakes are higher across Norfolk and Suffolk than the national averages suggest, given the region carries an average asking price of £673,945 across the areas we track. A larger loan means every extra basis point translates into a meaningfully bigger monthly hit, and buyers stretching for character properties or larger family homes in the region’s market towns and coastal villages have less headroom to absorb it than borrowers taking out smaller mortgages elsewhere. For sellers, the concern is less about a single week’s rate move and more about whether affordability keeps softening through the autumn, at a time when transactions already take patience to complete.
It’s worth putting this in context rather than treating it as a fresh crisis. Lenders have reacted with far less urgency than they did earlier this year. Some lenders, such as Family Building Society, have pulled fixed rate mortgages as a temporary measure, though this has been a calmer response than in March, when the conflict in the Middle East began and many lenders withdrew ranges altogether. This is a repricing, not a retreat. Products remain available, just at a higher cost, which is a different and arguably more manageable problem for borrowers to navigate.
Springall’s broader warning is the one worth holding onto. Borrowers expecting rates to fall over the next few weeks have had their hopes dashed, with the prolonged conflict making a base rate rise more likely, though this might not happen until November according to economists. For anyone in Norfolk or Suffolk with a fixed deal ending in the coming months, that’s a reasonably clear signal. Six months out is the point at which most lenders allow you to secure a new rate while retaining the option to switch if something cheaper appears before completion.
What happens next depends heavily on how swap markets behave over the coming weeks, and on whatever the Bank of England’s rate-setters decide when they meet. Neither is settled yet. What is clear is that the brief window of softer pricing seen earlier in the summer has closed, at least for now, and five major lenders moving in the same direction within days of each other is not something brokers describe lightly. For a regional market already characterised by long completion times and cautious buyers, that shift in the cost of borrowing is likely to shape decisions well into the autumn, whichever direction rates eventually take from here.
