<div id="readability-page-1"><div><div><p>The first major lenders have raised mortgage rates as the conflict in the Middle East and a potential inflation shock push up the price of borrowing.</p><p>HSBC and Coventry Building Society announced their fixed rates would increase from this week. Challenger lender, Gen H, said it had reversed a cut because of “global uncertainty”.</p><p>Before the outbreak of the war last weekend, markets had been expecting the Bank of England to cut the Bank Rate – currently 3.75pc – twice more this year, with an estimated 85pc chance of a reduction in March.</p><p>But markets now only expect one cut for the rest of 2026, suggesting that mortgage rates will remain higher for longer.</p></div></div><div><div><p>Coventry Building Society told its customers it was increasing all fixed rates for residential and buy-to-let mortgages from March 8. HSBC said it would increase its rates from Friday.</p><p>On Wednesday, a smaller lender, Gen H, reversed a cut it had been poised to make and instead made rate increases of up to 0.25 percentage points. The lender said: “The war in Iran is creating uncertainty in global markets.”</p><p>The average five-year fixed-rate deal was 4.95pc on Thursday morning, according to financial analysts Moneyfacts.</p><p>Those looking for a two-year deal could expect an average rate of 4.83pc – with both averages ticking up slightly compared to Wednesday.</p></div></div><div><div><p>Inflation fell to a ten-month low of 3.2pc in January this year, official figures showed, with predictions that it would fall close to the Bank of England’s 2pc target by April. But these estimates are now out-of-date, as the sharp jump in the cost of oil is likely to drive up inflation once more.</p><p>Brent crude prices have jumped by 12pc since Israel and the US began bombing Iran on Saturday.</p></div></div><div><div><p>The National Institute of Economic and Social Research, an economic think tank, said if higher energy prices persist, it could force the Bank of England to push interest rates back up above 4pc.</p><p>The Bank of England will announce its latest interest rate decision on March 19.</p><p>Earlier this year, banks had been competing to lower rates, with Barclays lowering rates on two-year mortgages to as little as 3.70pc. Nationwide also dropped rates to as low as 3.58pc.</p><p>Another indication that mortgage rates will jump was that swap rates, the main pricing mechanism for fixed rates, hit 30-day highs on Wednesday.</p><p>The five-year swap rose by 6pc from 3.50pc on Friday, before the conflict started, to 3.71pc on Wednesday. It usually takes approximately two to three weeks for changes in swap rates to filter through to lenders.</p><p>David Hollingworth, of broker L&amp;C Mortgages, said: “Once we enter this cycle of lenders adjusting their rates, we know that it almost invariably results in others following suit. The current uncertainty means that this upward pressure doesn’t look likely to ease quickly, although there are signs that the market reaction is at least levelling off for now.”</p><p>Aaron Strutt, of broker Trinity Financial, said: “It seems almost certain we are going to see a lot more rate changes over the coming days, so if you are on the hunt for a mortgage, it is worth locking into a new deal now.”</p><p>Adrian Anderson, a mortgage broker at Anderson Harris, said: “It was all looking very encouraging a week or two weeks ago, very encouraging for the mortgage market. Now, it is definitely much more uncertain.”</p><p>He added: “It shows how delicate the market is.”</p></div></div></div>

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<p>Major lenders, including HSBC and Coventry Building Society, have raised mortgage rates due to the ongoing conflict in the Middle East and rising inflation concerns. Challenger lender Gen H has also reversed a previous rate cut, citing global uncertainty. These changes reflect the increasing cost of borrowing in the current economic climate.</p>

- Major lenders have raised mortgage rates due to Middle East conflict and inflation concerns, with HSBC and Coventry Building Society announcing increases effective March 8.  
- The Bank of England's expected rate cuts this year have been revised down to just one due to inflationary pressures from rising oil prices.  
- The average rates for five-year and two-year fixed deals have slightly increased, reflecting broader market uncertainty and potential future rate hikes.

Banks raise mortgages rates as war in Iran hits borrowing costs