Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

Mortgage Rates Set to Rise as Swap Rates Increase, Says Moneyfacts

Moneyfacts has reported that more lenders are expected to reprice their mortgage rates in response to recent increases in swap rates. Major lenders including HSBC, Barclays, NatWest, and Santander have already raised their mortgage pricing.

According to Moneyfacts, the two-year swap rate rose from 4.06% to 4.26% between early August and 3 September 2026. The five-year swap rate also increased from 4.16% to 4.36% over the same period, based on data from Chatham Financial. Moneyfacts noted that in late February, the lowest priced mortgages from major lenders were around 0.29% above the two-year swap rate, but this margin has since increased.

Some lenders, such as Family Building Society, have temporarily withdrawn their fixed rate mortgage products. Moneyfacts described this as a calmer response compared to March 2026, when many lenders withdrew products following the start of conflict in the Middle East.

The impact of a 0.25% increase on a typical two-year fixed rate mortgage could add approximately £38 per month, or £456 per year, to repayments on a £250,000 mortgage over 25 years, if the rate rises from 5.63% to 5.88%.

Moneyfacts stated that the recent rise in swap rates is beginning to affect fixed rate mortgage pricing, with further changes expected. The firm also noted that swap rates are much higher than a month ago, and lenders are under pressure to review their margins.

Moneyfacts highlighted that the current situation is less severe than the market reaction to the Middle East conflict six months ago, when many lenders withdrew fixed rate deals. The firm also pointed out that the recent pressure on swap rates has not been caused by UK fiscal policy, and the scale of withdrawals and rate hikes is not as significant as after the 2022 'mini Budget'.

Borrowers who had hoped for falling rates in the coming weeks have seen those hopes dashed, according to Moneyfacts. The firm advised borrowers looking to remortgage within the next six months to seek advice and begin the process soon.