UK mortgage rates have surged to their highest levels in two years as the Middle East conflict reshapes expectations for interest rates.
The average five-year fixed rate has risen from 4.95% to 5.45%, the highest since July 2024, while two-year fixes have climbed from 4.83% to 5.43%.
The sharp move reflects a rapid repricing across the market, with nearly 1,500 mortgage deals withdrawn—around a fifth of available products—as lenders react to rising funding costs.
Markets are now expecting further tightening, with the Bank of England forecast to raise rates from 3.75% to 4.75% by year-end.
The shift has been driven by an energy-led inflation shock, as higher oil and gas prices feed through into borrowing costs.
Analysts warn that while some deals may return, they are likely to come back at higher rates, leaving borrowers facing significantly more expensive mortgages in the months ahead.
