Mortgage costs are rising again—and this time, global events are playing a direct role.
In recent weeks, borrowers have seen a sharp increase in rates, with new data showing that a typical homeowner is now paying around £788 more per year compared with before the latest escalation in tensions involving Iran.
According to Moneyfacts, the average two-year fixed rate on a £250,000 mortgage over 25 years has climbed to 5.28%. Just a few weeks ago, rates were noticeably lower, highlighting how quickly the market has shifted.
This change has been driven by growing economic uncertainty. As global tensions intensify, lenders have moved to reprice risk—pushing rates higher and, in many cases, pulling their most competitive deals altogether.
The impact has been immediate. Sub-4% fixed-rate mortgages, which were widely available only weeks ago, have largely disappeared from the market. Major lenders including Barclays, HSBC, NatWest, Nationwide and Santander have all withdrawn these lower-rate products.
At the same time, average rates have climbed steadily. Two-year fixed deals have risen from 4.83% at the start of March to 5.28%, while five-year fixes have increased from 4.95% to 5.32%. For borrowers opting for a five-year deal, that translates to roughly £651 more per year compared with just a fortnight ago.
Choice is also narrowing. The number of available mortgage products has fallen by 689 since earlier in the month, giving buyers and those looking to remortgage fewer options at a time when affordability is already under pressure.
Even so, the current situation is less severe than the turmoil following the September 2022 mini-Budget, when around a quarter of all mortgage deals were withdrawn almost overnight.
For now, borrowers on fixed-rate deals are shielded from immediate changes. But for those approaching the end of their current term, the message is clear: plan ahead. With rates continuing to move in response to global events and expectations around Bank of England policy, waiting could prove costly.
The market remains highly sensitive—and in the current climate, mortgage pricing can shift faster than many expect.
