Copy article

How far could ‘Trumpflation’ drive new mortgage average rates?

ended 20. March 2026

How high do YOU think average mortgage rates could go - higher than 5:50% to 5.75%? Looking for views for a piece on the back of new research from Moneyfacts showing:

  • Moneyfacts’ average two-year fix residential mortgage rate has risen from 4.83% at the start of March to 5.35% today. It’s the highest since March 2025. Adding around an extra £900 per year to the cost of borrowing £250,000 over 25 years.
  • Moneyfacts’ average five-year fix residential mortgage rate has risen from 4.95% at the start of March to 5.39% today. It’s the highest since July 2024. Adding around an extra £775 per year to the cost of borrowing £250,000 over 25 years.
  • Two- and five-year swaps are now around 1 percentage point higher than at the start of the conflict and at their highest level in more than a year (January 2025) – to now sit around 4-4.25%. These rates underpin mortgage pricing and reflect market expectations for central bank rates.
  • Analysis from INTEREST by Moneyfacts* of more than 30 years of historic rates data has found that average mortgage rates stabilise at around 1.5 percentage points above Base Rate.
  • If the conflict continues to disrupt the global economy, and the Base Rate hits 4-4.25% as markets are predicting, it may mean average rates on new mortgages stabilising at around 5.50% to 5.75%. Given the volatility of events this is subject to change in either direction.
  • This could add an extra £1,000 - £1,500 per year to the cost of borrowing £250,000 over 25 years compared to the overall Moneyfacts Average Mortgage Rate (4.89%) at the beginning March. 

2 responses from the Newspage community

Copy all

Copy

Editor
Michelle Lawson
Director at Lawson Financial
Markets dislike in instabilty and uncertainty. The longer the crisis continues, the higher the rates will go as the cost of borrowing increases. This will then have a knock on for inflation. The rates are increasing rapidly and rates being withdrawn at little to no notice. The longer this continues the higher the rates. I would expect rates to continue up to the late 4's and into the 5's in the coming weeks if not days as swaps are rocketing.
Copy

Editor
Rohit Kohli
Director at The Mortgage Stop
There is a real chance average mortgage rates move to figures not seen for many years if this conflict drags on. The danger is not just oil prices rising, but the wider sense that the global political system is stuck. None of the main parties looks willing to back down, and there is no credible sign of a resolution. Markets tend to price that uncertainty in very quickly. That matters because mortgage rates follow swaps and gilt yields, not headlines alone. If those stay elevated, lenders will keep repricing. The result is a weaker property market, fewer deals going through, more buyers forced out on affordability and a broader drag on the UK economy. At that point, this stops being a question about mortgage pricing and becomes a question about economic damage.