Nationwide is making rate hikes of up to 0.25% on selected fixed rates, effective tomorrow.

This includes rates across its first-time buyer, home mover, existing customers moving home and remortgage products.

In addition, rates will be increased on switcher and additional borrowing ranges.

Trinity Financial director of product and communications Aaron Strutt says: “If rates only go up by 0.25% then it won’t be as bad, but it seems like there is a long way to go before the conflict in the Middle East is resolved and this means more uncertainty in the money markets.”

“This often leads to higher borrowing costs which are then passed onto consumers and lead to higher rates.”

While mortgage rates had been gradually edging down in recent weeks as markets priced in the expectation of Bank of England rate cuts later this year, John Charcol mortgage technical manager Nick Mendes explains, the conflict in the Middle East has “introduced a fresh layer of uncertainty and we’ve seen that feed into financial markets quickly”.

Mendes comments: “Swap rates, which lenders use to price fixed mortgages, moved up earlier in the week as energy prices rose and investors reassessed inflation risks. Two-year swaps influence pricing for two-year fixed mortgages, while five-year swaps underpin five-year fixes.”

“Both have increased compared with where they were a week ago as markets readjust expectations around the path of Bank of England interest rates. That shift does not automatically mean mortgage rates will rise immediately, but it does reduce the pressure on lenders to keep cutting.”

Earlier today, HSBC and Coventry for intermediaries announced rates would be heading upwards from tomorrow and Monday, respectively.

Commenting on the news from HSBC and Coventry, L&C Mortgages associate director David Hollingworth says: “The conflict in the Middle East has led to market expectation of higher inflationary pressure causing rate cuts to be slowed or put on hold. That pushes up the cost for lenders when pricing their fixed rate mortgages, which can force rates higher.”

“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.”

“In the short term it’s likely that these increases will not see mortgage costs rocket but it does look like the improvements made in recent weeks could unwind quickly.”

“With such an unpredictable backdrop those borrowers that are considering a new fixed rate deal at the moment should be looking to secure the rate sooner rather than later.”