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Tue, 24 Mar 2026

Tue, 24 Mar 2026 Low-deposit mortgage deals hit as rates continue to soar

More than 200 first-time buyer deals have disappeared from the market, with more upheaval expected.
Mortgage rates are continuing to rise rapidly, with lenders pulling deals and increasing interest rates daily. Borrowers are facing uncertainty in the market, struggling to determine whether they're getting a good deal or not. Low-deposit mortgages, popular among first-time buyers, are being withdrawn at an alarming rate, with over 200 deals disappearing since March 6. According to financial experts, there's no end in sight for this mortgage market turmoil. "The harsh reality is that first-time buyers are facing average interest rates of over 6% on two-year mortgages, when they can only offer a 5% deposit," said Rachel Springall from Moneyfacts. Since the US-Israel war with Iran began, the UK's economic landscape has been turned upside down. The war has disrupted financial markets and led to rising borrowing costs, making it harder for lenders to price their mortgages. As a result, many mortgage products have been withdrawn, leaving borrowers with few options. Experts predict that this volatility will continue until the situation in the Middle East stabilizes. Borrowers are advised to seek independent advice to navigate this turbulent market. The Bank of England's base rate is expected to rise multiple times this year, but some economists are skeptical about this prediction. While new mortgage costs are rising, annuity rates for people approaching retirement have become more attractive due to rising bond yields. However, the war has had a significant impact on fuel prices in the UK, with governments introducing measures to ease the burden on consumers.