Biggest Shock to UK Mortgage Market Since the Mini-Budget Crisis
Sat 11 Apr 2026
The UK mortgage market has seen its biggest shock since the UK mini-Budget, with the conflict involving Iran pushing borrowing costs sharply higher over the past month.
New data from Moneyfacts shows that more than 1,200 mortgage deals have been withdrawn in just one month, significantly reducing options for borrowers.
Mortgage rates have also risen quickly. The average two year fixed rate has increased from 4.84% to 5.84%, while five-year fixes have gone up from 4.96% to 5.75%, the steepest rise since late 2022.
The impact is being felt most by borrowers coming off older fixed rate deals. Many are now facing increases of more than 3 percentage points, leading to much higher monthly repayments. On a typical £250,000 mortgage, this means paying around £150 more per month, with even bigger increases for those with smaller deposits.
Even the cheapest deals have become more expensive. The lowest two year fixed rate at 60% loan to value has risen by over one percentage point, as lenders respond to higher funding costs.
The conflict has rapidly changed expectations, pushing up borrowing costs in a short space of time. While the increases are not as extreme as those seen after the mini-Budget, they are still significant and have made mortgages much less affordable.
Many borrowers will face a noticeable rise in costs, especially those coming off older five-year deals, where rates have more than doubled, potentially adding hundreds of pounds to monthly payments.
With rates rising, fewer deals available and ongoing uncertainty, the market has become more volatile. Borrowers and brokers now need to act quickly, as competitive deals may not last long. Anyone planning to buy or remortgage this year should expect to pay significantly more than they would have before the conflict began.
Data tables
Table 1: Average mortgage rates
|
|
Mini-Budget 2022 |
Iran conflict 2026 |
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|
Mortgage term |
23 Sep-22 |
24 Oct-22 |
Difference |
1 Mar-26 |
1 Apr-26 |
Difference |
|
Average 2 Year Fixed Mortgage |
4.74% |
6.55% |
+181 bps |
4.84% |
5.84% |
+100 bps |
|
Average 5 Year Fixed Mortgage |
4.75% |
6.43% |
+168 bps |
4.96% |
5.75% |
+79 bps |
|
Average mortgage rates compared before and at the end of a 31-day period. Source: Moneyfactscompare.co.uk |
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Table 2: Product availability
|
|
Mini-Budget 2022 |
Iran conflict 2026 |
||||
|
Mortgage term |
23 Sep-22 |
24 Oct-22 |
Difference |
1 Mar-26 |
1 Apr-26 |
Difference |
|
Available residential mortgage products |
3,961 |
3,067 |
-894 (22.6% of the market) |
7,484 |
6,201 |
-1,283 (17% of the market) |
|
Net change in available residential mortgage products before and at the end of a 31-day period. Source: Moneyfactscompare.co.uk |
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Table 3: Effect on remortgage customers
|
Mortgage term & LTV |
Old rate |
New rate |
Difference |
Monthly difference |
Annual difference |
|
Remortgage from a 2-year fix – average rate |
5.80% |
5.84% |
+4 bps |
+£6 |
+£72 |
|
Remortgage from a 2-year fix – lowest rate (60% LTV) |
4.46% |
4.66% |
+20 bps |
£28 |
+£336 |
|
Remortgage from a 5-year fix – average rate |
2.77% |
5.84% |
+307 bps |
+£430 |
+£5,160 |
|
Remortgage from a 5-year fix – lowest rate |
1.23% |
4.66% |
+343 bps |
+£444 |
+£5,328 |
|
2-year average mortgage rate and lowest rate as per 1 April 2024 . 5-year average mortgage rates and lowest rate as per 1 April 2021 compared to cost of borrowing £250,000 over 25 years to average and lowest 2-year fixed rate available to remortgage customers as per 1 April 2026). Source: Moneyfactscompare.co.uk |
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Table 4: Change in average mortgage costs at different LTVs
|
Mortgage term & LTV |
1 Mar-26 |
1 Apr-26 |
M-o-m difference |
Extra cost (monthly) |
Extra cost (annual) |
|
Average 2 Year Fixed Mortgage |
4.84% |
5.84% |
+100bps |
+£148 |
+£1,777 |
|
Average 2 year fixed (95%) |
5.45% |
6.40% |
+95 bps |
+£145 |
+£1,736 |
|
Average 2 year fixed (90%) |
5.08% |
6.12% |
+104 bps |
+£156 |
+£1,872 |
|
Average 2 year fixed (75%) |
4.72% |
5.70% |
+98 bps |
+£144 |
+£1,731 |
|
Average 2 year fixed (60%) |
4.23% |
5.39% |
+116 bps |
+£167 |
+£2,007 |
|
Average 5 Year Fixed Mortgage |
4.96% |
5.75% |
+79 bps |
+£117 |
+£1,405 |
|
Average 5 year fixed (95%) |
5.47% |
6.18% |
+71 bps |
+£108 |
+£1,292 |
|
Average 5 year fixed (90%) |
5.12% |
5.98% |
+86 bps |
+£129 |
+£1,544 |
|
Average 5 year fixed (75%) |
4.90% |
5.66% |
+76 bps |
+£112 |
+£1,347 |
|
Average 5 year fixed (60%) |
4.56% |
5.43% |
+87 bps |
+£127 |
+£1,520 |
|
Cost of borrowing £250,000 over 25 years at rates on 1 March 2026 versus 1 April 2026. Rates on a first of month basis Source: Moneyfactscompare.co.uk |
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Table 5: Lowest rates
|
|
Mini-Budget 2022 |
Iran conflict 2026 |
||||
|
Mortgage term |
1 Sep-22 |
1 Oct-22 |
Difference |
1 Mar-26 |
1 Apr-26 |
Difference |
|
Lowest two-year fixed rate (60% LTV) |
3.24% |
4.56% |
+132 bps |
3.51% |
4.60% |
+109 bps |
|
Source: moneyfactscompare.co.uk |
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