How fragile the mortgage market is (March 2026)

Or, Now you see them, now you don’t. The short nano-second life of sub-4% mortgage deals in 2026.

Originally, this post was going to be an update on mortgage interest rates. For the first time in months, we’d seen a broad range of sub-4% rates across the market. And whilst there are still a few out there, they’re disappearing more quickly than they arrived.

Granted, the barrier to entry was high, with lenders typically asking 40% deposit/equity. And those deals were, for the most part, subject to an impeccable credit history. But it was a step in the right direction.

Even Reeves’ Spring Statement did little to derail this confidence. Average fixed-rate mortgages cost around £1,300/year less than they did before Labour came to power. And the Chancellor reaffirmed her commitment to affordable housing.

On the face of it, all quiet on the home front. But, given recent global events, that outlook’s blinkered. It would be naive to think that what’s happening in the Middle East will have zero impact on domestic finances. And it’s already making an impression in UK financial circles.

So, today, yes: let’s consider the positives. Lenders were (and some still are) showing intent. They want to offer the lowest rates they can. But we should also temper that positivity with potential knock-on effects that are scuppering their best endeavours.

What’s happening on the domestic front

As of right now (March 2026), a few high-street lenders are still offering sub-4% mortgage interest rates. But, as we said, there aren’t as many as there were a week ago. And the threshold is often high. You’ll typically need a 40% deposit/equity to access these deals, which start at 60% LTV.

At this point in this blog post, I was going to list which lenders were offering sub-4% deals. But, with the rate they’re disappearing, the data would probably have been obsolete by the time you got to read it.

If any sub-4% mortgages remain, they’ll be in our mortgage comparison tool. But here’s a reminder of lenders’ key considerations in relation to most of them:

Lenders’ Key Considerations

Here’s a recap of the high barriers to entry for most remaining sub-4% mortgage deals:

Eligibility: lenders are restricting most “headline” rates to borrowers with 40% equity/deposit or higher

Fees: Many sub-4% deals come with unusually high arrangement fees, from £995 to nearly £2,000; it may be cheaper to settle for a higher rate on a lower-fee or fee-free basis

Market Volatility: Rates had trended downwards following previous Bank of England base rate cuts. But swap rates are perhaps now more prevalent to UK mortgage interest rates. Global economic uncertainty is forcing swap rates up, meaning lenders are withdrawing or adjusting cheaper deals with little-to-no notice

The reality (average sub-4% mortgages are a long way off)

Average fixed-rate mortgage prices rose for the week ending March 8 (Moneyfacts rate watch). Average two-year fixed residential mortgages rose to 4.84%. The typical five-year fix climbed to 4.96%.

For the same period, swap rates rose around 10%. Two-year swap rates rose from 3.33% to around 3.65%, whilst five-year swaps rose from 3.50% to about 3.80%.

These rises may have more significance in informing the MPC‘s decision than UK inflation at the next meeting to discuss the Base Rate. This will affect mortgage rates (as well as other domestic goods vulnerable to global pricing).

Do these rises affect contractors?

Amongst the dozen-or-so lenders who’ve raised rates or are pulling deals completely (many of whom have solid contractor policies) are:

• Coventry Building Society,
• HSBC,
• Nationwide,
• Nottingham Building Society,
• Virgin Money.

Barclays, Natwest, Accord and Halifax have gone a step further:

Barclays is upping rates across a selection of its residential mortgage and remortgage products, including product transfers.

Natwest is also looking across its residential range. This includes upping rates for its existing customers and its additional borrowing range. On the bright side, the lender is reducing its 90% buy-to-let mortgages (for existing customers). It’s also introducing a new 75% LTV ‘additional borrowing’ buy-to-let loan.

Halifax, the longstanding contractor’s best friend, is also looking at its entire range. The lender has increased all its two-, three- and five-year fixed and tracker purchase and remortgage rates.

Accord is another lender with great contractor lending criteria. But even they’re feeling it. They’ve apologised profusely, but:

“due to market volatility, [they] haven’t been able to give [their] usual 24 hours’ notice” before increasing rates.

“On Wednesday, 11 March, [they] increased rates in [their] Residential New Business, Product Transfer/Additional Loans and Buy to Let New Business product ranges.”

Elsewhere, Principality, BM Solutions, Fleet Mortgages, and Paragon are all also revising rates and deals. TSB has raised rates by 0.50 bps (half a percent) across the board. That’s a significant jump! And Vida homeloans has withdrawn its entire buy-to-let range without notice.

Across the mortgage market, every type of mortgage has been affected in one way or another. It has gone ballistic.

Commenting on the current scenario, Moneyfacts’ head of consumer finance, Adam French, said:

“Mortgage rates had looked poised to move lower this week, but war in the Middle East has abruptly changed the mood.

“Around a dozen lenders made changes to their ranges this week, with a mix of reductions, increases and product withdrawals.”

What does the future hold?

The volatility we’re seeing in rates isn’t unprecedented. But it is unusual. And there’s little to suggest lenders will change their outlook whilst things look so bleak in the Middle East. That’s because every funding source available to banks and building societies is rising.

Yes, the Bank of England held the Base Rate at 3.75% in February. At that point, commentators were still confident that we’d see two more cuts this year. The events unfolding in the Middle East jeopardise that.

The Bank of England had been lowering rates because inflation had finally come under control. However, oil prices have ballooned since the start of the latest Middle East conflict. Also, exporters are abandoning shipping lanes and flight paths across the region.

The net effect is that inflation is sure to go up. And the BoE/government’s favourite tool for keeping inflation in check? You guessed it: the Base Rate of borrowing.

If you’re hanging around waiting for a better interest rate for your mortgage, you may have a long wait. The next MPC meeting is on March 19th. We’ll have a better gauge of where the Base Rate is heading, thus interest rates, thereafter.

If you are concerned, you’re not alone. Talk to one of our advisors. They have their fingers on the pulse and are experiencing first-hand how quickly mortgage products are rising or disappearing off the shelf altogether.

Our in-depth, up-to-date knowledge can help you find the best rate for your circumstances, even in this dynamic period. Based on current factors, the only way rates are heading for the immediate future is up. So, please, don’t put off until tomorrow what you can fix today.