Home buyers have warned that mortgages could rise by three years in weeks

Homebuyers are being advised to be prepared to “go hard” as mortgage rates rise again. NatWest has announced it will increase mortgage rates by a further 0.28%, giving rise to warnings of a potential 6% rate hike at the end of April.

Exchange rates, the amount a borrower agrees to pay a financial institution in exchange for currency, have risen by about 4.15% to 4.70% since the start of the Iran war. This has already had an impact on mortgage rates which have risen sharply in recent weeks.

The rise is due to fears that inflation will rise due to high oil prices. Brent crude reached $115 a barrel on Monday, which will translate into higher energy and fuel costs, reports the Mirror.

Experts have warned that if the conflict in the Middle East is not resolved as soon as possible, mortgage rates could continue to rise. at 6% mortgages are now a real possibility, Newspage reports.

Justin Moy, CEO of Chelmsford-based EHF Mortgages, said: “A disappointing but unexpected start to the week, with the Swap markets and lenders reacting to an ongoing conflict, with no immediate resolution in sight.”

“With oil pressures and inflation increasing, this increase of 0.28% across the board is likely to be repeated by many lenders this week. There is a real possibility that rates will be closer to 6% by the end of April if we do not see an improvement in the Middle East in the coming weeks.”

The last time average UK mortgage rates breached the 6% threshold was in October 2022, the highest level since 2008 following market turmoil following the micro-budget. Two-year fixed rates topped 6% on October 5, 2022, reached around 6.65% later that month, and stood at 2.34% in December 2021.

However, Shaun Sturgess, CEO of Swansea-based Sturgess Mortgage Solutions, said it could provide an opportunity for first-time buyers to negotiate a lower price. He added: “It’s starting to feel like the war in the Middle East is not going to end any time soon and lenders are now risking a heavy deflation due to rising oil prices and high interest rates.”

Some experts have warned 6% mortgages are now a real possibility, Newspage reports. Justin Moy, Managing Director of Chelmsford-based EHF Mortgages, said: “Trump has already turned the UK housing and property market on its head and rates are likely to continue to deteriorate in April. This is not the start of the week that lenders were expecting. It is also an opportunity for first-time buyers to negotiate a card harder.”

Adam Stiles, Managing Director at Helix Financial Partners in London, said that lenders are raising rates. He added: “NatWest is growing at such a high rate that we’re not seeing any slowdown in rate increases from lenders – they’re coming in big and fast.”

“Although we initially thought that the big increase was to deal with the uncertainty, the uncertainty is so great that this big increase in the rate of increase is increasing. We need stability and we need it now.”

Samuel Mather-Holgate, Managing Director and IFA at Swindon-based Mather and Murray Financial, said it was going to be a “difficult” summer. He said: “As uncertainty continues to emanate from the Middle East as Trump suggests that boots on the ground are the next step in the conflict, prices continue to rise in the credit market.

“The prospect of higher oil prices and higher inflation means that lenders are going higher in anticipation of the Bank of England doing so to try to prevent deflation, as they did after Russia invaded Ukraine. It looks like it’s going to be a tough summer for the housing market.”

Michelle Lawson, Director of Fareham-based Lawson Financial, said: “It’s a new week and the credit crunch and rate hikes are adding to the woes here in the UK. The knock on effect of the Middle East crisis is continuing and showing few signs.