{"id":509653,"date":"2026-04-02T22:12:10","date_gmt":"2026-04-02T22:12:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/509653\/"},"modified":"2026-04-02T22:12:10","modified_gmt":"2026-04-02T22:12:10","slug":"uk-mortgage-rates-spike-in-biggest-shock-since-liz-trusss-mini-budget-as-iran-war-drags-on","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/509653\/","title":{"rendered":"UK mortgage rates spike in biggest shock since Liz Truss’s mini-budget as Iran war drags on"},"content":{"rendered":"

The conflict in Iran has delivered the most severe blow to Britain’s mortgage market since the fallout from Liz Truss’s mini-budget in September 2022.<\/p>\n

Average rates on two-year fixed mortgage deals surged by a full percentage point during March, rising from 4.84 per cent to 5.84 per cent.<\/p>\n

Five-year fixed products also increased sharply, climbing from 4.96 per cent to 5.75 per cent, according to analysis from Moneyfacts..<\/p>\n

Such rapid increases in borrowing costs have not been seen since the market turmoil that followed the September 2022 fiscal statement.<\/p>\n

Homeowners seeking five-year deals are now paying rates at their highest level since November 2023, while two-year fixes have reached levels not seen since July last year.<\/p>\n

The market shift has also reduced options for borrowers, with lenders withdrawing 1,283 mortgage products.<\/p>\n

This represents 17 per cent of all available deals, marking the steepest contraction since the mini-budget disruption nearly four years ago.<\/p>\n

Homeowners coming to the end of five-year fixed arrangements are facing some of the largest increases, with rates around 300 basis points higher than when those deals were first agreed.<\/p>\n

\"Mortgages\"\/<\/p>\n

UK mortgage rates jump in biggest shock since Liz Truss mini-budget<\/p>\n

| <\/p>\n

GETTY<\/p>\n

For a typical \u00a3250,000 mortgage, monthly repayments have risen by around \u00a3150 since the conflict began.<\/p>\n

Borrowers with higher loan-to-value ratios are seeing even larger increases, with some facing additional monthly costs of up to \u00a3167.<\/p>\n

The cheapest 60 per cent LTV two-year fixed rate has climbed 109 basis points, rising from 3.51 per cent to 4.6 per cent.<\/p>\n

Financial markets have also shifted expectations for Bank of England policy.<\/p>\n

\"Donald<\/p>\n

The Iran conflict has sent shockwaves through global markets <\/p>\n

| <\/p>\n

GETTY<\/p>\n

Traders are now pricing in two interest rate increases this year, which would take the base rate from 3.75 per cent to 4.25 per cent.<\/p>\n

Before the escalation in Iran, markets had been expecting two rate cuts over the same period.<\/p>\n

Bank of England Governor Andrew Bailey attempted to calm expectations on April 2, suggesting markets may be moving too quickly to anticipate further rate rises.<\/p>\n

However, market pressure continued to build following remarks by Donald Trump, which provided little indication of when the conflict might ease or when the Strait of Hormuz could reopen.<\/p>\n

\"Bank<\/p>\n

The Bank has warned of significant damage being dealt to the British economy due to the conflict <\/p>\n

| <\/p>\n

GETTY<\/p>\n

Adam French, head of consumer finance at Moneyfacts, said: “The conflict in Iran quickly upended rate expectations and sent borrowing costs skyrocketing in the biggest shock to the UK mortgage market since the aftermath of the 2022 mini-budget.”<\/p>\n

He added rising rates, reduced product choice and increased volatility mean borrowers and brokers are operating in conditions where securing competitive deals has become more time-sensitive.<\/p>\n

Stephen Innes, managing partner of SPI Asset Management, said: “Traders are far less willing to reload risk on soft peace signals alone. The bar has been raised.<\/p>\n

“It is no longer enough to hint at de-escalation; the market now demands proof, something tangible, something that moves barrels, not just words.”<\/p>\n","protected":false},"excerpt":{"rendered":"The conflict in Iran has delivered the most severe blow to Britain’s mortgage market since the fallout from…\n","protected":false},"author":2,"featured_media":509654,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,585,466,2222,1891,50,229,56,44208,54,55,231],"class_list":{"0":"post-509653","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-iran","11":"tag-liz-truss","12":"tag-money","13":"tag-mortgage","14":"tag-news","15":"tag-politics","16":"tag-uk","17":"tag-uk-politics","18":"tag-united-kingdom","19":"tag-unitedkingdom","20":"tag-world-news"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/509653","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=509653"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/509653\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/509654"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=509653"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=509653"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=509653"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}