Fresh analysis indicates that customers of various major banks are facing new challenges due to recent global developments that have altered the financial landscape since early March. The likelihood of a reduction in the Bank of England Base Rate (BBR) has diminished, leading to the disappearance of fixed mortgages below 4%, as highlighted in a report by Moneyfactscompare.co.uk released on Tuesday.
According to the analysis, there has been a significant reduction in the number of lenders offering fixed-rate deals below 4%, impacting all major banks like Barclays, HSBC, Lloyds Bank, NatWest, and Santander, which have raised their rates since early March.
The report warns that ongoing market uncertainty may result in further rate hikes or the withdrawal of certain mortgage products. Several banks, including Barclays, HSBC, NatWest, Nationwide, and Santander, have ceased offering fixed deals below 4%, which were available just last week. The report also notes that the last time the lowest two- and five-year fixed rates exceeded 4% was in February 2025, based on data from the beginning of the month.
While average mortgage rates in the two, five, and ten-year fixed sectors have seen a year-on-year decline, recent increases have pushed the average rates for two and five-year mortgages above five percent. The Bank of England Base Rate was slashed to 3.75% in December 2025.
Subsequently, the average standard variable rate (SVR) dropped by 0.14%, from 7.27% to 7.13%. Although the BBR has decreased by 0.75% year-on-year, the average SVR has only fallen by 0.55%.
The Moneyfacts Average Mortgage Rate has decreased over the past year, dropping from 5.33%. Last month, the rate stood at 4.90%, but it has now surpassed 5%.
Rachel Springall, a finance expert at Moneyfactscompare.co.uk, mentioned that borrowers seeking the lowest fixed rates may be disappointed by the absence of sub-4% mortgages due to increasing swap rates. Lenders are cautious about pricing their deals too low, especially if they anticipate rising interest rates in the near future.
She emphasized the need for stability in the mortgage market and pointed out that while rates are rising globally, it is not reflective of UK fiscal policy. The recent surge in swap rates, driven by unrest in the Middle East, has led to inflated mortgage rates and the temporary withdrawal of certain deals from the market.
Springall also highlighted that prolonged uncertainty and potential spikes in inflation could lead to an increase in the Bank of England Base Rate before the year ends. She advised borrowers to seek guidance if they are worried about escalating costs and emphasized the importance of securing a fixed-rate deal to save on monthly repayments.
The report mentioned that borrowers could save nearly £300 each month by opting for a fixed-rate deal compared to a high revert rate, based on calculations using the current average standard variable rate of 7.13%. These calculations were based on a £250,000 mortgage over a 25-year term on a repayment basis, with a monthly repayment of £1,787 for the SVR compared to £1,502 for a 5.28% two-year fixed rate.