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\t\tLender’s pulled their deals amid mortgage chaos.\t<\/p>\n\t\t\tWednesday 25 March 2026 11:16 am
\n\t\t\t\t\t\u00a0|\u00a0\u00a0Updated:\u00a0<\/p>\n
\t\t\tWednesday 25 March 2026 11:17 am\n\t<\/p>\n
\t\tLender’s pulled their deals amid mortgage chaos.\t<\/p>\n
The UK mortgage market has been flipped upside down with Brits facing higher prices to borrow in the short-term as the Iran war rattles the economy.<\/a><\/p>\n The average five-year fixed deal for a homeowner has spiked to 5.54 per cent this morning, up from 4.95 per cent at the start of March, according to financial information platform Moneyfacts.<\/a><\/p>\n The level marks the highest for the five-year fix since September 2024.<\/p>\n Meanwhile, the average two-year fix has leapfrogged its five-year counterpart, spiking to 5.56 per cent this morning, up from 4.83 per cent at the beginning of the month.<\/p>\n Rachel Springall, finance expert at Moneyfacts, said: \u201cThere is hope this will be a temporary blip until the markets settle down, but it depends how long volatility prolongs. <\/p>\n \u201cThis is unusual, however, its all down to how the markets foresee interest rate setting, many expect higher rates over the shorter-term.\u201d<\/p>\n Lenders use swap rates, which reflect market expectations of future central bank base rates, to price mortgages. <\/p>\n \t\t\t\t\t\t Over the last month, expectations for interest rate cuts have drastically changed with economists across the City flipping on expectations of a cut as the conflict in the Middle East broke out.<\/p>\n The Bank of England voted unanimously to hold rates at 3.75 per cent this month, in a move that left the door open to further changes in either direction.<\/p>\n \t\t\t\t\tRead more<\/p>\n \t\t\tMortgage deals shrink by a fifth since outbreak of Iran war<\/a><\/p>\n The mortgage market has responded with jitters with lenders pulling around a fifth of available deals since the war began.<\/a><\/p>\n Amidst the market chaos, nearly 500 homeowner mortgages have disappeared from the market in mere days \u2013 marking the fastest rate since the Liz Truss mini-budget in 2022.<\/a><\/p>\n \u201cThe unrest in the Middle East is causing concerns over path of interest rate setting, with inflation expected to spike in the months ahead,\u201d Springall said.<\/p>\n \u201cIf deals come back within the coming days, they will likely be at inflated rates to catch up with the current state of play. After all, a volatile mortgage market tends to be a more expensive one.\u201d<\/p>\n She added brokers were \u201crushed off their feet trying to keep on top of the mortgage mayhem\u201d.<\/p>\n Nationwide and Halifax kicked off the week by driving up their rates.<\/p>\n Britain\u2019s biggest building society hiked its mortgage fixed and tracker rates by 0.3 per cent whilst Halifax slapped increases on all fixed-rate products across purchase, remortgage, and product transfer ranges.<\/p>\n It follows the likes of Barclays, HSBC UK and a number of building societies \u2013 including Coventry Building Society, Yorkshire Building Society and Nottingham Building Society \u2013\u00a0who have all kicked rates up in light of the conflict.<\/p>\n \t\t\t\t\tRead more<\/p>\n
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\n\t\t\t\t\tMortgage market hit by changing rate cut expectations<\/p>\n