HSBC and Coventry for intermediaries have announced interest rate increases due to the ongoing conflicts in the Middle East.
HSBC has announced increases for its residential mortgages and buy-to-let mortgages from tomorrow.
The bank did not reveal the extent of the cuts it will make tomorrow, but listed a wide range of products that will see price cuts.
These include residential starters, movers, mortgage refinancing and energy-efficient home deals.
The rates for refinancing mortgages, owner-occupied homes, international and energy-efficient homes will also fall.
The lender will also reduce prices on international residential and buy-to-let products.
Coventry for Intermediaries has announced that the rate increases will come into effect from Monday 8 March.
The mutual fund will increase all fixed residential rates for new and existing borrowers and extend all end dates.
Coventry for Intermediaries will also increase its fixed prices for new and existing BTL borrowers and limited company BTL borrowers, and extend all end dates.
Trinity Financial product and communications director Aaron Strutt said: “HSBC and Coventry are the first major lenders to announce rate hikes based on the rise in borrowing costs due to the chaos in the Middle East.”
“It seems almost certain that we will see many more interest rate changes in the coming days, so if you are looking for a mortgage it is worth getting a new deal now.”
“There are a large number of remortgages due this year and most borrowers can switch rates up to four months before their fixed rate expires. Delaying a decision to select a new deal can be costly, especially if you have a larger mortgage loan.”
Meanwhile, David Hollingworth, deputy director of L&C Mortgages, added: “We are now seeing the first steps from major lenders starting to bear fruit. HSBC announced this morning that rates will rise tomorrow. Coventry has also told the market that fixed rates will be increased from Monday.”
“The conflict in the Middle East has led the market to expect higher inflationary pressures, delaying or suspending interest rate cuts. That drives up the costs for lenders when pricing their fixed-rate mortgages, which can push up interest rates.”
“Once we get into this cycle of lenders adjusting their interest rates, we know that this almost always leads to others following suit. The current uncertainty means that this upward pressure is unlikely to subside anytime soon, although there are signs that the market reaction is at least leveling off for now.”
“In the short term, it is likely that these increases will not increase mortgage costs, but it does appear that the improvements made in recent weeks could disappear quickly.”
“With such an unpredictable backdrop, borrowers currently considering a new fixed rate deal should look to secure rates sooner rather than later.”
On Tuesday, Gen H hiked rates by up to 25 basis points after government bond yields rose overnight due to the conflict with Iran.
Several mortgage providers, who had to cut interest rates on Tuesday, have also started carrying out emergency repricings.