The availability of sub-4% fixed mortgage deals has sharply declined, with a financial information website attributing the scarcity to "Trumpflation" caused by the US war with Iran, impacting UK consumers. Rising rates mean new borrowers could pay hundreds of pounds more annually than just weeks ago, as financial markets become more volatile following the Middle East conflict.
Many major lenders no longer offer sub-4% fixed-rate deals that were available last week, Moneyfactscompare.co.uk reported. On Tuesday morning, only nine fixed-rate deals below 4% remained – a dramatic fall from 490 deals on March 9. Across the wider mortgage market, 689 fewer products were available on Tuesday compared to March 9, according to Moneyfacts’ figures. Banks and building societies are increasing mortgage rates and withdrawing products amid rises to swap rates, which lenders use to price mortgages.
The Bank of England is due to make its next base rate announcement on Thursday, but expectations of any potential cut have sharply diminished.
Rachel Springall, a finance expert at Moneyfactscompare.co.uk, said: “Borrowers looking for the lowest fixed rates will be disappointed to see the demise of sub-4% 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.”
Ms Springall suggested that if inflation jumps, there could be an increase to the base rate “before the year is over”.
She added: “It really is too early to tell what might happen, but borrowers searching for a new deal should seek advice if they are concerned about rising costs.”
Adam French, head of consumer finance at Moneyfacts, said some borrowers taking out a new deal could see hundreds of pounds more added to their annual mortgage bill, compared with if they had secured a deal earlier on in March.
He said: “The average two-year fixed rate has jumped from 4.83% at the start of March to 5.28% today – its highest level since April 2025. The average five-year fix has risen from 4.95% to 5.32%, now at its highest since February 2025.
“For a borrower with a £250,000 mortgage over 25 years, that equates to paying £788 more per year on a two-year fix, or £651 more on a five-year deal compared to just a fortnight ago.
“Choice continues to fall as lenders pull deals and reprice in response to rapidly rising funding costs with 689 fewer mortgage products available since March 9 – almost a tenth of the market.
“Borrowers may need to brace for further volatility in the weeks ahead as the global economy braces for a ‘Trumpflation’ wave.”
