Coventry Building Society has announced it is raising mortgage rates on selected products in the first move upwards by a major lender in weeks.
Lenders have universally been cutting rates in recent months in anticipation of more base rate cuts from the Bank of England.
But with the Budget due towards the end of this month and comments from Chancellor Rachel Reeves that Labour intends to raise allowed borrowing limits to fund its planned spending UK 10-year gilt yields have risen to to 4.20% currently from 3.75% in mid-September.
The situation in the Middle East and mixed signals on the US economy have also increased nervousness in the money markets, said brokers.
That has affected the swap rates used by mortgage providers to price products, which have risen sharply this week.
Two-year swaps are now above 4% after going below 3.7% in September.
Nick Mendes at broker John Charcol told the I: “In recent days, a range of factors has unsettled market expectations, leading to a rise in gilt yields and swap rates.
“This is likely to start feeding into the mortgage market, especially as lenders adjust to the changing conditions.
Some mortgage brokers suggested that Coventry’s move might mark a turning point for the market with smaller lenders likely to follow its lead though several pointed out that Virgin Money, another major lender, cut its rates yesterday.
Before the latest changes, Coventry offered one of the lowest five-year fixed-rate mortgages available at 3.69%.
A spokesperson for Coventry said the new rates would come into play this Friday and were designed to "maintain a competitive position" for the society.