Warning: Three million homeowners may deplete entire savings due to escalating mortgage expenses

Inflation data for April, released on May 24, and higher-than-expected labor market data released on June 13, have led to a recent surge in mortgage rates. Over the past three weeks, the average rate on a two-year fixed mortgage has increased from 5.34% to 5.92%, resulting in an additional monthly cost of £70 for someone with a £200,000 loan. Nationwide, a leading lender, has followed this trend by raising rates by as much as 0.4 percentage points on May 26 and an additional 0.2 percentage points on June 9.

The rate hikes by Nationwide are a response to the upward movement in swap rates and the overall increase in rates across the mortgage market. These adjustments ensure that Nationwide can continue to provide lending options for various borrowers. Despite the rate changes, Nationwide’s full range of mortgages remains available to customers.

NatWest, in an uncommon move, is also aligning pricing on many of its two- and five-year mortgage rates. Typically, two-year fixes are cheaper than five-year fixes when interest rates are low. However, since last autumn, average two-year fixes have become more expensive than five-year fixes due to expectations of imminent rises in borrowing costs and long-term declines.

Mortgage broker John Charcol’s Nicholas Mendes noted that this equal pricing of rates demonstrates the market’s volatility. Additionally, the Family Building Society will temporarily withdraw all fixed-rate mortgages via broker services for one week starting from 5 pm on Thursday. Clydesdale Bank and Atom Bank have also made changes, with Clydesdale Bank temporarily removing all new business mortgage products and Atom Bank increasing rates from 0.25% to 0.6% on certain products.