Current Situation
The upheaval in the mortgage market is the biggest since the aftermath of the 2022 mini-budget. Average mortgage rates in the UK have now surpassed 5%, driven by turmoil in the home loan market caused by the ongoing conflict in the Middle East.
As of March 11, 2026, the average two-year fixed-rate mortgage has reached 5.01%, while the typical rate on a five-year mortgage stands at 5.09%. This sharp increase has led to nearly 500 mortgage deals being pulled in the past 48 hours, marking a significant disruption in the market.
In total, 472 residential mortgage products were withdrawn, indicating a rapid response from lenders to the changing economic landscape. Adam French, a financial expert, noted that recent days have been some of the most turbulent in the UK mortgage market since the September 2022 mini-budget.
French commented, “It’s unwelcome news for borrowers, as the prospect of falling mortgage rates has quickly given way to rate rises.” The probability of a rate reduction this year has now fallen to 20%, down from 50% just days earlier, reflecting the uncertainty surrounding the market.
Looking Ahead
About 1.8 million fixed-rate deals are set to expire in 2026, necessitating that many borrowers secure new mortgages under these higher rates. Observers are concerned about the implications of the Middle East conflict on future mortgage rates, with the exact impact remaining unclear. Details remain unconfirmed.
Despite the current turmoil, French suggested that many of the withdrawn deals are likely to return within the next few days and weeks as lenders adjust their pricing to align with higher rate expectations. The base rate is expected to be held at 3.75% during the central bank’s upcoming meeting on March 19, 2026, which may also influence future mortgage rates.