The Path Ahead

The positive environment of the early 2026 mortgage market has been massively disrupted by the US/Israeli war with Iran.

Aside from the obvious outcomes, the primary economic driver of the conflict has been the inflation shock triggered by the rise in crude oil prices.

This has also had ramifications for stock markets throughout the world and other economic indicators, such as Swap rates.

Swap rates

These are a key influence on the pricing of fixed rate mortgages, with rate moves often being mirrored by lender deals a few weeks later. Up until the start of the war
(28 February) rates were on a downward trajectory since the beginning of the last quarter of 2025. The war dramatically changed the direction of travel, with massive rises in swap rates, and lenders following suite by pulling deals and repricing upwards.
(Source: Chatham Financial, 7 April 2026)

Consider locking in a deal?

Prior to the conflict, many borrowers were looking to the initial months of 2026 as
a time to implement decisions that were possibly put on hold until they knew the outcome of last November’s Budget.

With the added impact of current world events, borrowers, who are within six months from the end of their fixed rate mortgage period, should consider locking in a new deal.

Whilst many deals have already been priced upwards – the short-term trajectory may well continue in that direction.

Once a new deal rate is in place, we can then take a view over the next few months, should the conflict end, and the economic climate returns to the more positive environment of early 2026.

If so, this may then deliver the option of switching to a better rate, ahead of the new deal period commencing.

Bank of England Base Rate

There have been a number of reductions over the last year or so, although, due to world events, there was no reduction at the March meeting. The next rate-setting meeting will be at the end of April.

Fixed deals coming to an end

A sizeable 1.8m homeowners will be looking to remortgage in 2026, as their fixed-rate deal period comes to an end. This equates to around 21% of all outstanding residential mortgages.

Additionally, there are around 290,000 buy-to-let loans that will also come to fruition in 2026.
(Source: UK Finance, December 2025)

For those that are coming off 5-year fixed rate deals, there may be a shock, although it may still be beneficial to lock in a rate now. As for those coming off 2-year deals, you may be pleasantly surprised.

Professional advice is key

To help make sense of your options, it’s important to seek advice.

As it stands, at the time of writing (early April), the ‘average’ fixed rates for a 2-, or 5-year deal currently sit around a high 5%, but better rates in the realms of a mid to high ‘4’ may be on offer. Although the lowest rates generally apply to loans of 60%, or less, against the value of the property.
(Source: moneyfactscompare.co.uk, 7 April 2026)

Positive developments

It’s not all bad, as after a difficult few years, 2026 was starting to offer a more optimistic outlook.

The industry regulator, the Financial Conduct Authority, has helped to create an environment that has enabled some relaxation in the affordability criteria, which could mean that borrowers may be able to borrow more (or borrow at all).

Alongside this relaxation, there are also improved loan-to-income deals, which may offer up to five, six or seven times income!

Both elements will certainly help those struggling to obtain the mortgage they need, and enable others to borrow more – to secure the home they want, or to improve the one they have.

More tailored needs

Some mortgage applications may be fairly straightforward, but others can be more complex – such as the borrowing needs of the self-employed. For this group, and for others, the issues may only become apparent, once we start talking through your situation, and understand what you require.

In fact, the more complex cases are a key reason why potential borrowers turn to us.

This is because we also have relationships with Specialist lenders, who may
provide the solution, if the High Street lenders are not a viable, or suitable option.

Market Facts…

Base Rate
Remains at 3.75%
The 9-person committee voted unanimously to keep the rate at this level.
(Source: Bank of England, 19 March 2026)

Inflation
Annual CPI inflation figure is 3.0%
The Bank of England target figure is 2%.
(Source: Office for National Statistics, CPI, 25 March 2026)

Property prices
Average annual UK Property price rose by 2.2% to £277,186.
(Source: Nationwide, House Price Index, March 2026)

Mortgage Rates
Average 2-year Fixed Rate – 5.89%
Average 5-year Fixed Rate – 5.78%
(Source: moneyfactscompare.co.uk, 7 April 2026)

In fact, whatever your situation, we’d fully assess the suitability of the options on offer. And you can be reassured that we operate in this sector day-in day-out, plus have the qualifications and expertise to deliver advice that meets your needs.

Your property may be repossessed if you do not keep up repayments on your mortgage.