Britain’s mortgage market is beginning to feel the shockwaves of a global bond sell-off, raising the prospect of higher borrowing costs for homeowners.

The immediate warning sign is the rise in UK swap rates — a key measure used by lenders when setting fixed mortgage prices. The five-year swap rate has climbed above 4.52%, its highest level since October 2023, while rates are now significantly higher than they were a year ago.

The pressure is being driven by a combination of rising oil prices, inflation fears and growing expectations that central banks may need to keep interest rates higher for longer. Investors have been selling government bonds, pushing yields upward, with UK government debt experiencing particularly strong movements.

For mortgage borrowers, that financial-market turbulence can eventually arrive at the kitchen table.

Higher swap rates increase the funding costs faced by lenders, potentially feeding through into fixed-rate mortgage deals. Russ Mould of AJ Bell warned that rising bond yields could also push up borrowing costs for mortgages, credit cards and car loans.

The timing could prove uncomfortable for the government. Higher government borrowing costs could make it harder for Prime Minister Andy Burnham to deliver on promises to ease pressure on household finances.

Burnham attempted to reassure markets during his first appearance at Prime Minister’s Questions, stressing that the autumn budget would be guided by “fiscal responsibility”. Yet the bond market remains vulnerable to developments far beyond Westminster.

Oil prices are particularly important. Rising energy costs can intensify inflation, potentially forcing central banks to respond with tighter monetary policy. At the same time, governments are competing with major technology companies issuing large quantities of debt to finance artificial-intelligence infrastructure.

There is, however, no immediate mortgage shock.

The latest Moneyfacts figures show average fixed mortgage rates were unchanged on Thursday, with a typical two-year fix at 5.59% and a five-year fix at 5.63%.

But lenders do not price mortgages in isolation from financial markets. If the bond sell-off continues, borrowers coming to the end of existing fixed deals could find the next rate considerably less comfortable.

For homeowners, the message is therefore less about panic and more about timing.

A volatile bond market in London may sound remote. But if swap rates remain elevated, its final destination could be the monthly mortgage payment.