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Mortgage costs are rising and homeowners who need to renew a fixed rate deal should move quickly, experts have warned.

The Bank of England is likely to hold rates when its Monetary Policy Committee meets on Thursday, rather than cut them as had been widely anticipated before the Middle East crisis.

That means further pressure on mortgage deals as the best offers get pulled from the market. The so-called “swap rates”, which reflect the markets view of which way borrowing costs will go, are on the rise.

Since the outbreak of the Iran war, mortgages at less than 4 per cent, common not so long ago, have met a rapid demise.

Elliot Nathan, partner at mortgage broker Eddge, says: “As of today, its easier to name which banks haven’t increased rates in the past few days.

“I suspect with the uncertainty we shall continue to see SWAPs rise which in turn will lead to lenders making further increases. I would strongly recommend anyone thinking of securing a fixed rate for a remortgage which is due to expire this year, to move quickly.”

None of the big lenders are offering a fixed rate below 4 per cent at the moment.

All of the biggest banks – namely Barclays, HSBC, Lloyds Bank, NatWest and Santander – have increased rates since the start of March. Building societies have done the same. Nationwide rates on some fixed rate deals go up by 0.35% from Tuesday March 17.

While recent mortgage costs are up, they are still better than a year ago, before the Bank of England cut rates. Sadly for the UK, borrowing costs are being driven by world events rather than UK government policy, which may limit what politicians are able to do in mitigation, say brokers.

Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “Borrowers looking for the lowest fixed rates will be disappointed to see the demise of sub-4 per cent mortgages, but they are not sustainable with swap rates increasing.

“Lenders look at margins very carefully, so it would be unwise to price their deals too low, if the expectations are for interest rates to rise, even if over the short-term.”

She added: “The mortgage market needs stability, and really, borrowing costs are lower than in recent years, and we have had sub-4 per cent deals on the shelves for over a year (since February 2025). While many of the biggest lenders no longer offer a sub-4 per cent fixed deal, it is a cautious decision.

“Mortgage rates are rising due to global pressures, not UK fiscal policy, so while not ideal, rate increases are not mirroring the ‘mini-Budget’ fiasco in 2022.”

Peter Stimson, director of mortgages at MQube, said: “Since the start of the Iran war, swaps, which fixed rate mortgage pricing is based off, have risen around 0.60% and all of this has essentially now been passed on to mortgage customers with all the big lenders now having repriced at least twice, in the form of higher mortgage rates.”

This means a first time buyer wishing to take out a 90 per cent LTV mortgage is now paying around 4.65 per cent for a 2-year fixed rate (£999 fee) and around 4.90 per cent for a 5-year deal (£999 fee).

Mr Stimson added: “However, rates are changing rapidly and the longer the war continues the more we can expect rates to continue their upward trajectory. How bad could this get? If this is protracted and we get oil approaching $150 a barrel, we may see yet another interest rate rise being priced into the swap curve by the market and another jump in mortgage rates. Hopefully, there is resolution before then.”

Oil on Tuesday was trading at $103 a barrel.

Dan Coatsworth, head of markets at AJ Bell, said: “The longer the oil price stays above $100 per barrel, the louder the alarm bells for the market over inflation risks. Iran’s continued attacks on regional energy infrastructure are helping to keep crude at elevated levels.”

Some say the issue for mortgage prices is a lack of new housing.

Mary-Lou Press, President of NAEA Propertymark (National Association of Estate Agents), said: “The loss of sub-4 per cent fixed rate mortgages will be disappointing for many buyers, particularly first-time buyers already facing affordability pressures.

“This shift highlights how sensitive mortgage rates are to wider economic uncertainty, making it harder for people to plan and potentially slowing activity across the housing market.

“Even small increases in rates can significantly impact borrowing capacity and monthly costs, reinforcing the need for stability and confidence.”