Mortgage lenders are pulling as many deals as they did in the aftermath of the disastrous mini-budget in September 2022, brokers have warned.

Barclays, Halifax and NatWest have already increased rates after the conflict in Iran unleashed a wave of economic uncertainty.

A surge in the price of oil has led to fears of rising inflation and increased the likelihood that the Bank of England will raise its base rate of interest later this year.

• Iran latest: war will drive inflation, OBR warns

The Bank had been expected to lower the base rate from 3.75 per cent when it meets next week but economists and financial markets now think this is unlikely. It uses Bank rate to keep the consumer prices index measure of inflation as close to 2 per cent as possible. The higher the rate of inflation, the more likely Bank rate is to stay steady or even go up.

Swap rates, which banks use to lend to each other and influence mortgage rates, have risen about 0.6 percentage points since the start of the war.

• What the Iran war means for petrol prices, savings and mortgages

David Hollingworth from the mortgage broker L&C said: “Last week we saw a number of big lenders pulling fixed rates but yesterday it gathered momentum. While the number of changes is similar to the mini-budget, the scale of the rises isn’t yet as bad, averaging a 0.2 percentage point increase.

“Smaller specialist lenders have withdrawn rates without even repricing, things are moving so fast.”

Hollingsworth said that anyone who is looking for a new mortgage deal should act now because the rates on offer might soon go up.

He said: “We’ve seen lots of customers fix their rates to protect against further increases.”

Adrian Anderson from the mortgage broker Anderson Harris said he is on track for a record month of business. “Lots of people with mortgages ending in the next six months were waiting to fix because rates looked like they may get cheaper.

“What is happening in Iran has focused people’s minds and our clients have said they want to get deals done because rates are likely to be cheaper now than they will be next week.”

Some 1.2 million mortgage holders have fixed deals that are due to end in the next six months, according to the Financial Conduct Authority, the City regulator.

You can often lock in a new rate up to six months in advance of your deal ending and can still switch if a better deal comes along.

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Chris Sykes from the mortgage broker MSP Financial Solutions said: “The market concern is this war will have an inflationary effect, meaning the Bank of England may need to be a lot slower with any rate reductions.

“The market had priced in further base rate reductions but because these are now less certain, rising swap rates have pushed up lenders’ costs, and they need to pass this on.

“We are fortunate that rates were at some of the lowest levels we’ve seen in a long time, and most of the increases are 0.1-0.3 percentage points — returning to the rates of about six months ago.”

The lowest two-year fixed rate for someone remortgaging is 3.73 per cent from Yorkshire Building Society, available at up to 60 per cent loan-to-value ratio with a £995 fee.

The lowest five-year fixed rate for someone remortgaging is 3.99 per cent from First Direct at the same loan-to-value ratio, with a fee of £490.

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