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[Last Updated: 22 March 2026]
Could the era of falling mortgage rates already be over?
Just weeks ago, lenders were trimming fixed-rate deals, swap rates were easing, and the consensus across the mortgage market pointed firmly towards cheaper borrowing in 2026. That picture has changed dramatically. Conflict in the Middle East has sent oil and gas prices sharply higher, pushed UK swap rates upwards, and forced lenders into a wave of repricing not seen since the aftermath of the 2022 mini-Budget. As of mid-March 2026, the average two-year fixed rate has climbed from 4.84% to 5.28%, while five-year fixed rates have risen from 4.96% to 5.32% Mortgage Solutions
Key Takeaways
- Average UK fixed mortgage rates have risen sharply in March 2026, with two-year fixes averaging 5.28% and five-year fixes at 5.32% — up from below 5% at the start of the month.
- The Bank of England held the base rate at 3.75% on 19 March 2026 in a unanimous vote, citing Middle East-driven inflation risks, and signalled a possible rate hike if price pressures persist.
- Major lenders including Barclays, HSBC, NatWest, Nationwide, Santander and Virgin Money have all increased mortgage rates, with some raising pricing by up to 0.35 percentage points.
- Sub-4% fixed-rate deals have disappeared entirely from the residential mortgage market.
- Borrowers whose fixed deals end in the next six months may benefit from locking in a rate now, as most lenders allow applications up to six months before a current deal expires.
Why Mortgage Rates Are Climbing in March 2026
The sudden reversal in mortgage pricing has caught many borrowers off guard. To understand what is happening, it helps to look beyond the Bank of England’s base rate and focus on two key forces driving the shift: geopolitical disruption and its effect on UK swap rates.
The Middle East Conflict and UK Swap Rates
Fixed-rate mortgages in the UK are not priced directly off the Bank of England base rate. Instead, lenders use swap rates — the cost at which banks lend to one another over a set period — as the primary benchmark for setting fixed-rate mortgage pricing.
Conflict in the Middle East has caused a significant increase in global energy and other commodity prices, pushing up inflation expectations across financial markets. This, in turn, has driven swap rates sharply higher. When swap rates rise, lenders face increased funding costs and typically pass those costs on through higher mortgage rates.
The result has been dramatic. At the start of March, the cheapest two-year fixed rates available via brokers were around 3.55%, with five-year fixes from 3.77%. By 19 March, those had climbed to 4.14% and 4.24% respectively. Industry estimates suggest around 50 to 60 mortgage products were withdrawn in a short period, with many returning later at higher rates. According to one widely cited figure, lenders pulled nearly 700 deals from the market within a fortnight.
What the Bank of England’s 19 March Decision Means
On 19 March, the Bank of England’s Monetary Policy Committee (MPC) voted unanimously to hold the base rate at 3.75%. All nine members supported the decision — a notable shift from February, when the vote was split 5–4 in favour of holding, with four members calling for a cut.
The unanimous hold reflects the severity of the inflationary shock. Based on energy prices as of 16 March, the Bank now expects CPI inflation to be close to 3.5% in March — almost half a percentage point higher than forecast in its February Report. The MPC signalled that if the conflict persists and has a bigger impact on UK prices, it would need to adopt a ‘more restrictive policy stance’— language widely interpreted as an indication that rate hikes are on the table.
Governor Andrew Bailey stated that the Bank would be monitoring developments ‘extremely closely’ and stood ready to act to ensure inflation returns to the 2% target.
How Far Could Rates Go — and Could the Base Rate Actually Rise?
Here’s the thing: before the Middle East conflict, markets had been pricing in further base rate cuts through 2026. That expectation has been sharply reversed.
Following the Bank’s 19 March announcement, two-year gilt yields jumped 0.3 percentage points to 4.39%, while 10-year gilts rose to 4.77% — close to their highest level since 2008. Traders were pricing in two potential interest rate hikes in 2026, which could take rates to 4.25%.
Rob Wood, chief UK economist at Pantheon Macroeconomics, stated that while his central call was for Bank Rate to remain on hold in 2026, the surge in oil and natural gas prices ’tilts the risks further towards hikes’.
Bear in mind, a base rate increase is not inevitable. Much depends on how long the conflict continues, how far energy prices rise, and whether the inflationary impact proves temporary. But the fact that hikes are now being discussed — after months of expecting cuts — underlines just how quickly conditions have changed.
Current Average Mortgage Rates at a Glance (March 2026)
The table below shows how average mortgage rates have shifted since the start of March 2026, based on data from Moneyfacts.
| Product Type | Start of March 2026 | As of 17 March 2026 | Change |
|---|---|---|---|
| Average 2-year fixed rate | 4.84% | 5.28% | +0.44% |
| Average 5-year fixed rate | 4.96% | 5.32% | +0.36% |
| Cheapest 2-year fix (60% LTV) | 3.55% | 4.14% | +0.59% |
| Cheapest 5-year fix (60% LTV) | 3.77% | 4.24% | +0.47% |
| Average overall mortgage rate | 4.90% | 5.27% | +0.37% |
| Average SVR | Just below 8% | — | |
| Bank of England base rate | 3.75% (held 19 March 2026) | No change | |
Source: Moneyfacts, MoneySavingExpert. Figures correct as of March 2026. Rates are subject to change based on individual circumstances and lender criteria.
Worth noting: despite the sharp increases, average borrowing costs remain lower than a year ago — the average mortgage rate across all product types was 5.62% in March 2024 and 5.33% in March 2025. That said, the direction of travel is now firmly upwards.
Which Lenders Have Increased Rates This Month
The repricing has been widespread, affecting virtually every major high street bank and building society. Below is a summary of confirmed rate changes from the week ending 20 March 2026.
| Lender | Rate Increase | Products Affected |
|---|---|---|
| Barclays | Up to +0.15% | 2, 3, 5 and 10-year fixed (purchase and remortgage) |
| HSBC | Broad increases (effective 23 March) | Residential, BTL, Premier Exclusive, energy-efficient range |
| NatWest | Up to +0.35% | Purchase, remortgage, FTB, BTL, trackers, product transfers |
| Nationwide | Up to +0.35% | FTB, homemover, remortgage, switcher, additional borrowing |
| Santander | Up to +0.35% | FTB, homemover, large loans, remortgage, BTL, trackers |
| Virgin Money | 2yr +0.35%, 5yr +0.30%, 10yr +0.25% | Purchase, remortgage, BTL, product transfers, shared ownership |
| Co-operative Bank | Up to +0.30% | All purchase and remortgage fixed rates; products withdrawn temporarily |
| Coventry BS | Products withdrawn | All new customer rates (no immediate replacements announced) |
Source: Mortgage Solutions, Mortgage Introducer. Figures correct as of week ending 20 March 2026. Based on published rates and subject to change.
NatWest’s two-year fixed remortgage product at 60% LTV with a £1,495 fee rose from 3.97% to 4.32% — a 35-basis-point increase. Nationwide’s homemover two-year fixed at 60% LTV with no fee went from 4.14% to 4.49%. These are not isolated examples; they reflect a market-wide repricing.
Fixed Rate vs Tracker — Which Makes More Sense in a Rising Market?
With fixed rates climbing rapidly, one question dominates: is it better to lock in now, or take a gamble on a tracker deal?
The Case for Locking In Now
For borrowers who value certainty, a fixed-rate mortgage removes the risk of further increases. If swap rates continue to rise — or if the Bank of England ultimately raises the base rate — anyone who has already locked in will be protected for the duration of their fix.
Most lenders allow borrowers to secure a new rate up to six months before a current deal expires. This means a rate can be reserved today and, if pricing improves before completion, many lenders will allow a switch to the lower rate without penalty. It is a ‘best of both worlds’ approach that has become increasingly popular during periods of volatility.
That said, fixed rates now come at a premium compared to just a few weeks ago. A two-year fix that might have been available at 3.85% in early March could now sit above 4.25%. The cost of certainty has gone up.
When a Tracker Might Still Work
Tracker mortgages are priced at a set margin above the Bank of England base rate, so repayments rise and fall in line with base rate changes. In a market where the base rate sits at 3.75% and may not move for several months, a tracker could offer lower initial repayments than a fixed deal priced above 5%.
However, the risk is obvious: if the base rate does increase — even modestly — monthly costs will rise immediately. Tracker deals suit borrowers with a higher tolerance for risk, strong financial buffers, and no immediate concern about payment stability.
A common misconception is that tracker rates always track the base rate closely. In practice, lender margins vary, and some tracker products include ‘collars’ — minimum rates below which the mortgage rate cannot fall — which may limit the benefit of any future base rate cut.
It may be worth speaking to a qualified mortgage adviser to compare the total cost of fixed and variable options based on individual circumstances. For those on tight budgets, payment certainty from a fixed rate often outweighs the potential savings from a tracker.
Five Practical Steps Borrowers Can Take Right Now
Rather than waiting to see what happens next, there are several actions that may help borrowers navigate the current environment.
1. Start the Remortgage Process Early
For anyone whose current fixed deal expires within the next six months, beginning the remortgage process now is worth serious consideration. Securing a rate today provides protection if prices continue to climb — and, as noted above, many lenders allow a switch to a better deal if rates improve before completion.
Delaying risks being rolled onto the lender’s standard variable rate (SVR), which currently averages just below 8%. The gap between an SVR and a competitive fixed rate is substantial, potentially adding hundreds of pounds to monthly repayments.
2. Consider a Product Transfer
A product transfer — switching to a new deal with an existing lender — can be quicker and simpler than a full remortgage. There is typically no need for a new valuation or legal work, and processing times are often faster.
Bear in mind, though, that a product transfer limits the borrower to what one lender offers. A whole-of-market broker may be able to find a more competitive rate elsewhere. It is worth comparing both options before committing.
3. Check for Early Repayment Charges
Borrowers still within a fixed-rate period should check whether an early repayment charge (ERC) applies. In some cases, paying an ERC to exit a current deal and secure a lower rate elsewhere could save money over the longer term — but this requires careful calculation.
4. Review Affordability and LTV
LTV (loan-to-value ratio) has a significant impact on the rates available. Borrowers who have built up equity since their last mortgage may now qualify for a lower LTV band, unlocking access to more competitive pricing. Checking a property’s current estimated value against the outstanding mortgage balance is a straightforward first step.
5. Seek Independent Advice
The mortgage market is moving quickly, and products are being withdrawn and repriced at short notice. A qualified, FCA-regulated mortgage adviser can assess individual circumstances and help identify the most suitable options from across the market.
What Happens If a Fixed Deal Expires During Rising Rates
This is a scenario facing roughly 1.8 million UK households whose mortgage deals are due to end in 2026, according to industry estimates.
When a fixed-rate period ends, borrowers are automatically moved onto their lender’s SVR — which, as of March 2026, averages just below 8%. For a borrower with a £200,000 mortgage over 25 years, the difference between a 5% fixed rate and an 8% SVR is approximately £370 per month.
The good news is that this outcome is avoidable. Lenders typically send a reminder around three months before a deal expires, and most allow a new rate to be locked in well ahead of the expiry date. Borrowers who act early have options; those who leave it until the last moment may find the best deals have already been withdrawn.
It is also worth noting that the FCA’s Consumer Duty requires lenders to support existing borrowers in finding suitable products — so getting in touch with a current lender to discuss options is a reasonable first step.
Mortgage Rate Outlook for the Rest of 2026
What happens next depends on several factors, none of which can be predicted with certainty.
| Scenario | What It Could Mean for Mortgage Rates |
|---|---|
| Middle East conflict de-escalates | Energy prices fall, swap rates ease, fixed rates may begin to edge downward — but unlikely to return to sub-3.5% levels seen in early 2026 |
| Conflict continues, oil prices remain elevated | Inflation stays above 3%, base rate held or raised, fixed rates remain above 5% or climb further |
| Significant escalation | Inflation spikes towards 4%, base rate hike becomes likely, fixed rates could approach 6%+ |
Source: Bank of England MPC minutes (March 2026), Pantheon Macroeconomics, Moneyfacts analysis. Forecasts are speculative and subject to change.
The Bank of England revised its inflation forecast upwards, now expecting CPI of around 3% in Q2 2026 (up from 2.1% forecast in February) and potentially up to 3.5% in Q3 if higher wholesale gas prices feed through to the Ofgem energy price cap from July.
The next MPC meeting is scheduled for 30 April 2026. That decision will be shaped by how events in the Middle East unfold over the coming weeks — and by any new inflation data published in the interim.
In short, the outlook is genuinely uncertain. What is clear is that the trend of gradually falling mortgage rates seen through 2025 and early 2026 has, at least for now, been interrupted.
Fraud and Scam Awareness
Periods of market volatility tend to attract mortgage-related scams, including fraudulent ‘mortgage advisers’ offering unrealistically low rates, phishing emails posing as lenders, and fee-charging services that provide no genuine advice.
Anyone seeking mortgage advice should verify that the adviser or firm is authorised by the Financial Conduct Authority (FCA). The FCA Register allows checks against any firm or individual. Regulated mortgage advice is protected by the Financial Services Compensation Scheme (FSCS), which covers claims up to £85,000 per eligible person per firm.
If something does not feel right, or if a deal seems too good to be true, the following contacts may help:
- Financial Conduct Authority (FCA) — Consumer helpline: 0800 111 6768 | register.fca.org.uk
- Financial Ombudsman Service — 0800 023 4567 | financial-ombudsman.org.uk
- Action Fraud (national fraud reporting centre) — 0300 123 2040 | actionfraud.police.uk
Disclaimer: The information on bestmortgagesforyou.co.uk is for general informational purposes only and does not constitute financial advice. Mortgage products, rates and eligibility criteria change frequently. Always consult a qualified, FCA-regulated mortgage adviser before making financial decisions. This site is not affiliated with the FCA, Bank of England, or any lender. All rates cited in this article are based on published data as of March 2026 and are subject to change based on individual circumstances and lender criteria, in line with the latest FCA regulatory guidelines.
Rising mortgage rates are never welcome news — but informed borrowers are better-placed borrowers. The key takeaway from March 2026 is that waiting for rates to fall may no longer be the safest strategy; acting early, comparing options, and seeking professional advice are the most practical steps available.
The next Bank of England decision is due on 30 April 2026, and the market will be watching closely. In the meantime, those approaching the end of a fixed deal would do well to explore their options sooner rather than later.
Sources
- Bank of England — Monetary Policy Summary and Minutes, March 2026
- GOV.UK — Interest Rates and Bank Rate Explainer
- MoneyHelper — Mortgage Brokers
- FCA Register
- Financial Ombudsman Service
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Senior financial practitioner with over 25 years' experience in banking and MSME consultancy in Lampung. Currently serving as Deputy Editor-in-Chief, delivering banking, business economics, and financial literacy content that is warm, accurate, and accessible to all.
Judul Pekerjaan: Deputy Editor-in-Chief & Senior Financial Literacy Writer
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