Mortgage Rates Spike as Lenders Pull Deals Amid Middle East Tensions

The average homeowner mortgage rate has climbed sharply from 4.89% to 5.48% since late February — a jump of 59 basis points in a matter of weeks. The average two-year fixed rate now sits at 5.51%, while the average five-year fixed rate has reached 4.95%.

Our Mortgage Advisers are reporting a rapid narrowing of choice, with some lenders pulling entire ranges and not yet replacing them. The pattern echoes the volatility seen during the 2022 Liz Truss mini-budget, as funding costs surge in response to global events.

Why Are Mortgage Rates Rising?

Markets are now pricing in interest rates staying “higher for longer.” Tensions in the Strait of Hormuz — a critical route for global oil supplies — have triggered an oil shock and pushed swap rates higher. Lenders, who use these swap rates to price fixed mortgages, have reacted quickly by increasing rates and withdrawing hundreds of products in recent days.

This has left borrowers with fewer attractive deals available at any one time and the risk of further upward pressure on fixed rates if funding costs remain elevated.

What This Means for Borrowers

• Fewer mortgage deals on the market, reducing your options
• Potential for even higher fixed rates in the coming weeks
• Increased urgency for anyone coming to the end of a fixed-term deal or planning to remortgage or buy

“Acting sooner rather than later can make a real difference — but it’s essential to check affordability and meet lender criteria,” said a spokesperson at Cyborg Finance.

If you fixed your mortgage rate at the right time, you may well be able to rise out this price shock but no one could forecast this and your rate could be ending soon. It's best to get out early; sometimes you can secure today's rates as insurance against future rises and still benefit from reductions if they come.

Get Expert Advice Before Rates Climb Further

At Cyborg Finance, our qualified mortgage brokers are monitoring the market daily and can help you navigate these fast-moving changes. Whether you’re remortgaging, buying a new home, or reviewing your current deal, we’ll find the right options for your situation.

Don’t delay — speak to a qualified adviser today.

Visit: www.cyborg.finance/contact

Sources:
Mortgage Strategy, Property Industry Eye, and latest market data from Moneyfacts and lender announcements.