Mortgage rates rise as lenders respond to swap rate volatility

Mortgage rates in the UK and US are experiencing upward pressure as lenders adjust to increased volatility in the swap rate market. In the UK, major lenders including HSBC, NatWest, Skipton Building Society, and The Co-operative Bank have begun repricing or withdrawing mortgage products. Average fixed homeowner rates have reached recent highs, with the two-year fixed rate climbing to 5.63% and the five-year fixed rate rising to 5.68%.

The increase is also affecting the buy-to-let sector, where average two-year and five-year fixed rates have risen to 5.32% and 5.70%, respectively. Financial experts note that lenders are adjusting rates to protect margins against rising wholesale funding costs and inflationary concerns linked to geopolitical tensions.

In the United States, the 30-year fixed mortgage rate is reported at 6.74%. Forecasters suggest that rates are likely to remain elevated, potentially staying between 6.3% and 6.8% over the next 12 months due to persistent inflation, Federal Reserve policy, and Treasury yields.