Mortgage expert Katy Eatenton has issued advice to borrowers (Image: Katy Eatenton)
Homeowners are being urged to act amid an increase in mortgage rates due to the conflict in the Middle East. A mortgage expert has warned that borrowers “cannot afford to sit back and hope rates will fall again” following news that major lenders are raising their rates.
The war has impacted the global economy, with major lenders such as Halifax, Barclays, Santander and Nationwide Building Society recently confirming rate hikes. Halifax increased rates on all its two, three and five-year fixed mortgages on Tuesday (March 10) while Barclays increased rates on its home loans by 0.1%. Santander will follow suit on Wednesday by increasing some rates by 0.24% points, while Nationwide has already increased fixed rates by 0.25 percentage points.
Mortgage rates are on the rise (Image: Getty)
Mortgage holders should ‘take action’
Katy Eatenton, mortgage and protection specialist at St Albans-based Lifetime Wealth Management, described the mortgage situation as “mad”. She is suggesting that anyone considering a mortgage, or who is close to remortgaging, take action.
Ms Eatenton told Express: “During February, mortgage rates were slowly but surely coming down, the Bank of England was confident its 2% inflation target would be hit, and markets were predicting another cut to the base rate on March 19 when the Monetary Policy Committee next meets.
“But when Trump launched those first missiles on Iran, everything changed — and overnight. Why? Because the Middle East is crucial to the world’s oil and gas supplies.
The market has rapidly shifted in under a fortnight
“And war in the Middle East has created the risk of a massive shortage of oil and gas, which has the potential to prove hugely inflationary. It is already feeding through into increased prices at the pumps. Worries about inflation have seen a dramatic reversal in mortgage pricing over the past week or so.”
Increasing mortgage rates cause financial strain for homeowners coming off fixed-rate deals as they face higher monthly repayments. Some borrowers switching from fixed deals face a shock when re-fixing at higher current rates.
Some experts are expecting rates to rise by half a per cent in a fortnight. Others predict that rates could soon rise above the 4% mark.
Mrs Eatenton added: “All in all, mortgage borrowers coming off a fixed rate in 2026 are now facing a much less friendly landscape than many expected just 11 to 12 days ago.
“UK Finance says 1.8 million fixed-rate mortgages are due to end this year, and for those households my advice is simple: do not assume that events in the Middle East are a blip and that rates will soon start coming down again. Because there are simply no guarantees that will happen. Things could deteriorate and rates could rise even higher.”
Major banks such as Halifax are increasing their rates (Image: Getty)
You can lock in a rate months in advance
According to the expert, the best way to combat the situation is to “move at speed”. She is warning people against being forced into “whatever rate is left at the last minute”.
Mrs Eatenton explained: “Anyone considering a mortgage at the moment, or who is close to remortgaging, should take action, and do it now. Many borrowers are not aware that they can lock into a rate months before their mortgage starts and, if a cheaper rate subsequently becomes available with that lender, switch onto the cheaper rate.”
She added: “If your budget is tight and certainty matters most, a longer fix, such as over a 5-year term, may be your hedge against volatility in the markets. If you have more breathing space and can tolerate some risk, a shorter fix may be worth considering.
“But ultimately, what you go for all comes down to your own unique circumstances and risk profile. All in all, now is not a time for guesswork. Inflation, swap rates and geopolitics are all moving at speed.”
