Biggest shock to the UK mortgage market since mini-Budget

Adam French, Head of Consumer Finance 01603 476154 Email Adam

The biggest shock to the UK mortgage market since the mini-Budget

The Iran conflict has triggered the sharpest shock to the UK mortgage market since the 2022 mini-Budget, sending rates soaring in the space of just one month. Five key ways the residential mortgage market has shifted:

The biggest shock to the UK mortgage market since the mini-Budget

Mortgage deals rapidly repriced. Average two-year fixed rates jumped +100bps in a month (4.84% to 5.84%), with five-year fixes up +79bps (4.96% to 5.75%), marking the sharpest rise since autumn 2022. (Table 1)
Product choice contracted rapidly. Mortgage availability has fallen by 1,283 products (17% of the market) in one month, the steepest contraction by market share since the mini-Budget disruption. (Table 2)
Shock for remortgage borrowers. Those rolling off older five-year deals are hardest hit, with rates up 300+ bps and repayments rising by £417–£444 per month (£5k+ annually). (Table 3)
Affordability deteriorated quickly. Typical borrowers now face £150 extra per month (+£1,777 annually) on a £250k loan compared to costs at the start of the conflict, with higher LTV borrowers seeing increases of up to £167 per month. (Table 4)
Lowest rates moved sharply higher. The cheapest 60% LTV two-year fixed rate has risen +109bps (3.51% to 4.66%), as the most competitive deals have been quickly repriced. (Table 5)

Mortgage deals rapidly repriced. Average two-year fixed rates jumped +100bps in a month (4.84% to 5.84%), with five-year fixes up +79bps (4.96% to 5.75%), marking the sharpest rise since autumn 2022. (Table 1)
Product choice contracted rapidly. Mortgage availability has fallen by 1,283 products (17% of the market) in one month, the steepest contraction by market share since the mini-Budget disruption. (Table 2)
Shock for remortgage borrowers. Those rolling off older five-year deals are hardest hit, with rates up 300+ bps and repayments rising by £417–£444 per month (£5k+ annually). (Table 3)
Affordability deteriorated quickly. Typical borrowers now face £150 extra per month (+£1,777 annually) on a £250k loan compared to costs at the start of the conflict, with higher LTV borrowers seeing increases of up to £167 per month. (Table 4)
Lowest rates moved sharply higher. The cheapest 60% LTV two-year fixed rate has risen +109bps (3.51% to 4.66%), as the most competitive deals have been quickly repriced. (Table 5)

Adam French, Head of Consumer Finance at Moneyfactscompare.co.uk, 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.

“Average mortgage rates have risen at pace, with two-year fixes increasing by 100 basis points from 4.84% to 5.84% in just one month and five-year fixes up by nearly 80 basis points, from 4.96% to 5.75%. The cheapest deals available to borrowers have moved dramatically too, the lowest two-year fixed rate at 60% LTV has increased by over 100 basis points from 3.51% to 4.60%. While this falls short of the extreme jumps seen in the aftermath of the mini-Budget, it is still a sharp and sudden shift that has materially worsened affordability in a very short space of time.

“For many borrowers, the cost could be significant. Someone taking out a typical two-year fix will find it costs £150 more per month on average compared to just a few weeks ago. However, the real payment shock will be felt by those coming off older five-year deals, where rates have more than doubled, pushing up repayments by many hundreds of pounds per month.

“The combination of rising rates, reduced choice and heightened volatility means borrowers and brokers are operating in a market where timing is critical and the window to secure competitive deals can be very short-lived. Unfortunately, anyone looking to buy or remortgage this year needs to prepare for substantially higher borrowing costs than expected before this conflict began.”

Adam French, Head of Consumer Finance at Moneyfactscompare.co.uk, 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.

Data Tables

Table 1: Average mortgage rates

	Mini-Budget 2022			Iran conflict 2026
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

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)
Available residential mortgage products before and at the end of a 31-day period. Source: Moneyfactscompare.co.uk

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 as per 1 April 2026). Source: Moneyfactscompare.co.uk

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

Table 5: Lowest rates

	Mini-Budget 2022			Iran conflict 2026
Mortgage term	1 Sep-22	24 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

Data Tables

Table 1: Average mortgage rates

	Mini-Budget 2022			Iran conflict 2026
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

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)
Available residential mortgage products before and at the end of a 31-day period. Source: Moneyfactscompare.co.uk

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 as per 1 April 2026). Source: Moneyfactscompare.co.uk

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

Table 5: Lowest rates

	Mini-Budget 2022			Iran conflict 2026
Mortgage term	1 Sep-22	24 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

Notes to editors

You are welcome to use part or all of this press release, so long as we are sufficiently sourced. We would appreciate a link back to Moneyfactscompare.co.uk.

Pioneering financial comparison technology for over 35 years, Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

Notes to editors

You are welcome to use part or all of this press release, so long as we are sufficiently sourced. We would appreciate a link back to Moneyfactscompare.co.uk.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, banking, life, pension and investment products in the UK.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

If you're looking for extra comment, a chart or more information, then please give us a call. We are always more than happy to help.

Adam French Head of Consumer Finance

01603 476154

Email Adam

Rachel Springall Finance Expert

01603 476210

Email Rachel

Caitlyn Eastell Personal Finance Analyst