Mortgage deals ‘trickling back on to market but at higher rates’

Some mortgage products have started trickling back on to the market – but with much higher rates – according to a financial information website, as lenders prepare to proactively contact 1.6 million customers whose fixed-rate deals will finish before the end of the year.

Moneyfacts said the average two-year fixed-rate homeowner mortgage on the market had increased from 4.83% at the start of March to 5.75% by Friday morning – the highest average rate since August 2024.

The average five-year fixed-rate mortgage has risen from 4.95% at the start of March to 5.69% on Friday – the highest since December 2023.

Hundreds of deals disappeared from the market and mortgage rates were hiked amid changing expectations for financial markets. Swap rates, which are used by lenders to price mortgages, have increased. The conflict in the Middle East has pushed up inflation expectations.

Adam French, head of consumer finance at Moneyfacts, said: “Mortgage rates have continued to rise sharply, with around three in four active lenders increasing rates, launching or withdrawing products this week.”

He added: “Products have been slowly trickling back on to the market in recent days, with 160 added since Wednesday, but priced at much higher rates than previously which has been driving up average rates on new mortgages.

“There is still a net 1,620 fewer products on the market than there were when lenders began pulling deals in response to rising funding costs on March 9 2026.”

Mortgage lenders met with Chancellor Rachel Reeves on Thursday and a commitment was secured to proactively contact 1.6 million customers whose fixed-rate deals will finish between now and the end of 2026.

Lenders will set out customers’ options and how to access bespoke support.

As well as securing the commitment to contact customers, the Chancellor also reaffirmed the Mortgage Charter with lenders. The charter helps to ensure that borrowers in difficulty receive support.

Ms Reeves said on Thursday: “In uncertain times, people need clear reassurance and practical help.”

Mr French said: “Getting lenders to recommit to the charter is welcome news at a time when many households are facing a sharp rise in borrowing costs.

“If these measures are fully back in play, they can offer borrowers some flexibility, but it’s important to be clear that they often come with very real trade-offs.

“Options such as extending a mortgage term or switching to interest-only can ease monthly pressures in the short-term but increase the total cost of borrowing over time, so they need to be carefully considered and clearly explained by lenders and brokers.

“While these measures may provide some breathing space and help households avoid falling into a debt trap, they do not solve the underlying affordability challenge.

“Many borrowers coming up for remortgage are now facing the prospect of paying thousands of pounds more per year than they would have expected just a few weeks ago, at a time when inflationary pressures are once again building.

“For some, this support may help keep their budgets just about manageable, but it won’t remove the financial strain altogether.”

A spokesperson for UK Finance said: “Mortgage lenders provide a wide range of support to their customers. Help will always be available and anyone worried about their mortgage should get in touch with their lender as early as possible.”

Contact will vary by lender and customer, but options could be by phone, letter or email.

The impact for mortgage holders rolling off fixed-rate deals will often depend on how long they had fixed for and what the interest rate environment was at the time.

Nicholas Mendes, mortgage technical manager at John Charcol said: “The main message for anyone worried is simple.

“Do not leave it until the last few weeks. Review your options early, understand what your payments could look like, and if the jump is going to be difficult, speak to your lender or broker before you come under pressure.

“That will usually give you the best chance of finding a workable solution.”

Hina Bhudia, a partner at Knight Frank Finance, said: “Lenders risk becoming inundated and being forced to reprice even higher than they otherwise might have done, which creates a snowball effect – a more intense clamour to secure a rate that puts further pressure on lenders.”

On Thursday, a spokesperson for Santander UK said the bank is “carefully monitoring customers’ financial health” and that it has a range of existing options to support those facing financial difficulties tailored to their individual circumstances.