Two-year fixed rates still available below 3.55% - but how is the war going to affect mortgage rates?

by Aaron Strutt

Mar 04 2026

Banks and building societies are set to increase their most competitively priced mortgage rates again, following the war in Iran and the escalation of conflicts across the Middle East. 

Funding costs in the money markets have risen and some lenders have already said this will have a knock-on effect on UK mortgage rates.

Pete Dockar, chief commercial officer of mortgage lender Gen H, was quoted as saying: “The war in Iran is creating uncertainty in global markets and as a result, swap rates have shot up overnight. Specifically, the hampered distribution of oil through the Strait of Hormuz is already having an effect on global financial markets, and swap rates are no exception.”

Mortgage lenders typically price fixed-rate mortgages using SWAP rates. Santander recently made some large price improvements, especially to its low deposit mortgages, but it also made some small rate rises. It will be interesting to see what happens to mortgage rates over the next few days and weeks, especially if the situation in the Middle East does not de-escalate.  

Is it worth securing a mortgage rate now?

Yes. If you are applying for a mortgage or holding off on securing a rate, it makes sense to lock in now. You can monitor the market and try to swap to cheaper deals if they are available before you complete your purchase or remortgage. At the moment, there have not been large-scale rate rises. 

How much are mortgage rates now?

Two-year fixes start from just above 3.5%, while five-year fixes are available from 3.80%. These are typically offered through larger lenders like Barclays, Halifax, NatWest, and HSBC for Intermediaries.

Mr Dockar added, “This is a bit of a blow to the mortgage market because, for the first time in recent memory, buyers were feeling really optimistic; steady house prices and lower rates were driving healthy demand. But if there’s anything we’ve had to get used to in the last few years, it’s this kind of volatility. So as ever, I return to the one piece of consumer advice that never changes: talk to your broker and lock in a rate if it’s right for you.”

Speak to a Trinity Financial adviser today

The mortgage market moves fast — and the right advice can make a significant difference to the rate and deal you secure. Get in touch with our team to discuss your options.

Call Trinity Financial on 020 7016 0790 to secure a fixed or tracker rate mortgage, book a consultation, or use our appointment calendar

The information contained within was correct at the time of publication but is subject to change.

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