What’s happening in the mortgage market right now?

The UK mortgage market has experienced a significant shift in March 2026, with the outlook changing dramatically in just a matter of weeks.

The recent turnaround

In early March, lenders were reducing fixed mortgage rates as sentiment around interest rates improved. However, the escalating conflict involving Iran has pushed oil and gas prices higher, increasing inflation risk and affecting the UK interest rate outlook¹ .

As a result, lenders are continuing to increase fixed mortgage rates, and the anticipated March base rate cut did not materialise¹.

Where rates stand now

The Bank of England held the base rate at 3.75% on 19 March 2026, with the decision made unanimously by the Monetary Policy Committee².

For borrowers, this has meant noticeable changes to available rates. The average two-year fixed mortgage rate stood at 5.28% on 17 March 2026, up from 4.83% at the start of March, while the average five-year fixed rate was 5.32%, up from 4.95% over the same period¹.

All residential fixed mortgage deals under 4% have been withdrawn¹, and major lenders including Barclays, HSBC UK, Nationwide, NatWest and Santander have raised rates in recent days³.

What this means for borrowers

The rapid repricing means that deals available one day may not be there the next. Lenders are responding quickly to changes in their funding costs, and with significant numbers of borrowers looking to secure rates before further increases, the market has become particularly volatile.

This volatility makes timing difficult for those looking to secure a new mortgage or remortgage.

Looking ahead

The longer-term outlook remains uncertain. While some experts still predict that interest rates may be cut later this year, others think they could rise. Much will depend on how long the Middle East conflict continues and its impact on energy prices and inflation.

What should you do?

If your fixed-rate deal is ending in the next six months, now is a good time to review your options. While the market is volatile, many lenders allow you to secure a rate several months in advance, giving you some protection against further increases.

The key is not to wait until the last minute. Understanding your options early means you can make informed decisions rather than being forced to accept whatever is available when your current deal expires.

Next steps

If you’re concerned about your mortgage or considering your options in the current market, it may be helpful to review the rates currently available and consider which strategy best suits your circumstances.

References:

1. The Guardian (2026). New mortgages up by £800 a year amid ‘Trumpflation’ from Iran war. [online] the Guardian. Available at: https://www.theguardian.com/money/2026/mar/17/uk-new-mortgages-trump-inflation-iran-war-deals     [Accessed 24 Mar. 2026]
2. MoneySavingExpert (2026). Base rate held at 3.75% – here’s what it means for you and when it might change. [online] MoneySavingExpert.com. Available at: https://www.moneysavingexpert.com/news/2026/03/base-rate-held/         [Accessed 24 Mar. 2026].
3. Mortgage Introducer (2026). UK mortgage rates and product changes (Week ending 20 March 2026). [online] Mpamag.com. Available at: https://www.mpamag.com/uk/mortgage-industry/guides/uk-mortgage-rates-and-product-changes-week-ending-20-march-2026/568864 [Accessed 24 Mar. 2026].

Your home/property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.

All the information in this article is correct as of the publish date 26^th March 2026. The opinions expressed in this publication are those of the authors. The information provided in this article, including text, graphics and images does not, and is not intended to, substitute advice; instead, all information, content, and materials available in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.

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