Borrowers face renewed uncertainty as mortgage rates shift again, but a pause in the Bank of England base rate should not deter them from securing a deal, according to analysis from Moneyfactscompare.co.uk.
Recent weeks have seen several major lenders – including Barclays, HSBC, Lloyds Bank, NatWest and Santander – cut selected fixed mortgage rates in response to swap rate movements, although it remains unclear whether further reductions will follow.
Earlier expectations that interest rates would stay higher for longer had pushed lenders to increase mortgage pricing, with average rates recording their sharpest monthly rise since July 2023. While the Bank of England base rate has eased over the past year, this has not been fully reflected in borrower costs, leaving many customers weighing up when to act.
Rachel Springall, finance commentator at Moneyfactscompare.co.uk, said: “Borrowers have been left in limbo as it is difficult to know whether they should rush to lock into a fixed deal or wait and see if lenders make more sizeable cuts. Unfortunately, the outlook on interest rates remains uncertain, so mortgage holders coming off a cheap fixed rate will have to cover higher repayments this year, which will be incredibly frustrating. It is still worth moving off an expensive revert rate, as borrowers could save almost £2,500 a year moving onto a fixed rate deal*.
“The Bank of England refuses to rush any decisions, and with fears of a recession already creeping in, it looks like stagflation has thrown out any plans for cuts this year. Economists expect the BOE base rate to hold in the short-term, and it’s looking increasingly unlikely we will see a cut until 2027. However, borrowers will hope that the mortgage mayhem experienced over recent weeks will calm, but repricing could go both ways amid swap rate moves. Mortgage rate hikes have been driven by the conflict in the Middle East, where the disruption of supply chains has created muddied waters for the future path of inflation and interest rate setting.
“Increasing pressures on households have the potential to echo the shocks felt by the UK during the summer of 2023, so the biggest concern for consumers will be how long they need to endure it, particularly for those looking to buy a home or remortgage, as mortgage rates have risen significantly in a short space of time.”
| Mortgage market analysis | ||||||
| Average mortgage rates | Apr-21 | Apr-24 | Apr-25 | Mar-26 | Apr-26 | 24-Apr-26 |
| Standard variable rate (SVR) | 4.41% | 8.18% | 7.60% | 7.13% | 7.13% | 7.13% |
| Two-year fixed mortgage | 2.58% | 5.80% | 5.32% | 4.84% | 5.84% | 5.81% |
| Five-year fixed mortgage | 2.77% | 5.39% | 5.18% | 4.96% | 5.75% | 5.70% |
| 10-year fixed mortgage | 2.93% | 5.77% | 5.63% | 5.61% | 6.01% | 6.14% |
| Average rates shown are as at the first available day of the month, unless stated otherwise. Source: Moneyfactscompare.co.uk |
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| Moneyfacts Average Mortgage Rate | ||||||
| Apr-21 | Apr-24 | Apr-25 | Mar-26 | Apr-26 | 24-Apr-26 | |
| Moneyfacts Average Mortgage Rate |
2.68% | 5.65% | 5.28% | 4.90% | 5.72% | 5.68% |
| Calculated from the total of all on-sale, core market, fixed and variable tracker mortgages. Standard exclusions apply: Self-build only, shared ownership only, new build only, shared equity only, standard variable rates and adverse credit. | ||||||
| Source: Moneyfacts Average Mortgage Rate. | ||||||
The Moneyfacts Average Mortgage Rate rose by 0.82% month-on-month (1 March versus 1 April), the biggest monthly rise since July 2023 of 0.83% (1 June versus 1 July). While the spikes in rates look similar on the surface to the shocks felt in the summer of 2023, and not forgetting the mini-Budget in 2022, they have very different driving forces.
Lenders will be watching the decision by the Monetary Policy Committee (MPC) very closely, as it would be unwise to price deals too low in the short-term, so they will react if swap rates start rising significantly again.
Springall continued: “At the end of February, before the unrest in the Middle East began, the biggest banks (Barclays, HSBC, Lloyds Bank, NatWest and Santander) had their lowest two-year fixed mortgages priced around 0.30% above the two-year swap rate of 3.33%, but back then there were also expectations for more BOE base rate cuts. This is why borrowers had a decent pool of sub-4% fixed deals to choose from. Base rate tracker mortgages currently look attractive but could be a gamble if interest rates rise this year, so choosing a deal with no early repayment charge would be wise.
“Lenders will be looking to reprice to catch up to higher swap rates over the coming days, but also to compete for new business, it’s all in the margins. Until the market sees more stability, there is very little scope for lenders to drop rates substantially due to the prolonged unrest in the Middle East. Any borrower concerned about securing a mortgage would be wise to seek advice from a broker to navigate the mortgage maze.”
