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Tue, 17 Mar 2026

Tue, 17 Mar 2026 Typical new mortgage costs soar £788 a year in two weeks

Lenders have hiked rates on new deals and withdrawn products as war creates uncertainty in the markets.

* A typical mortgage is now £788 more expensive than before the Iran war began
* For a 25-year mortgage of £250,000 with an average two-year fixed rate of 5.28%, borrowers can expect higher interest rates compared to pre-war times
* The biggest lenders have pulled the best sub-4% mortgage deals since the US-Israel strikes on Iran began
* The average two-year fixed rate has jumped from 4.83% at the start of March to 5.28% now, its highest since last April
* For a typical mortgage, a five-year fixed deal is now £651 more expensive than a fortnight ago
* There are 689 fewer mortgage products available than on 9 March, representing almost a tenth of the market
* Barclays, HSBC, NatWest, Nationwide and Santander no longer offer sub-4% fixed deals, which were available last week
* First-time buyers are particularly affected by these changes, according to Mary-Lou Press, president of NAEA Propertymark.