Fresh analysis has revealed customers of many major banks facing fresh challenges as world events have transformed the landscape since the beginning of March. A reduction to Bank of England Base Rate (BBR) appears increasingly improbable, with the turmoil in mortgage re-pricing resulting in a disappearing act of sub-4% fixed mortgages, according to Moneyfactscompare.co.uk analysis published on Tuesday morning.

Summarising the current situation, Moneyfactscompare said the pool of lenders offering a sub-4% fixed rate deal had taken a “significant blow”. All of the biggest banks, namely Barclays, HSBC, Lloyds Bank, NatWest and Santander, have raised rates since the beginning of March.

It added that prolonged market uncertainty “can lead to further rate increases or product withdrawals. Barclays, HSBC, NatWest, Nationwide and Santander no longer offer sub-4% fixed deals, which were available last week”. Throughout the market, it said, the last time the lowest two- and five-year fixed rates were priced above 4% was more than a year ago, in February 2025, based on first-of-month data.

Year-on-year average mortgage rates across the two, five and 10-year fixed sectors have declined, but recent rises have pushed the average two and five-year rates above five per cent, it said. The Bank of England Base Rate was reduced to 3.75% in December 2025.

Since then, the average standard variable rate (SVR) has dropped by 0.14%, from 7.27% to 7.13%. Year-on-year, BBR has declined by 0.75%, but the average SVR has decreased by just 0.55%.

The Moneyfacts Average Mortgage Rate has declined over the past 12 months, from 5.33%; last month the rate stood at 4.90%, but it has recently exceeded 5%.

‘Cautious decision’

Rachel Springall, 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.

“The mortgage market needs stability and, really, borrowing costs are lower than in recent years, and we have had sub-4% deals on the shelves for over a year (since February 2025). While many of the biggest lenders no longer offer a sub-4% fixed deal, it is a cautious decision.

“Mortgage rates are rising due to global pressures, not UK fiscal policy, so while not ideal, rate increases are not mirroring the ‘mini-Budget’ fiasco in 2022.

“In an unprecedented turn of events, the unrest in the Middle East has led to rising swap rates, which have inflated mortgage rates and caused deals to be pulled from sale, some temporarily. These developments have scuppered expectations for the Monetary Policy Committee to vote for a cut to the Bank of England Base Rate, now much more likely for a hold this week.

“If such uncertainty is prolonged, and indeed if inflation spikes, we could even see an increase to BBR before the year is over. 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. It is still important to secure a fixed deal compared to a high revert rate, as almost £300 could be saved each month in repayments and existing borrowers could lock into a new deal six months in advance.”

Moneyfactscompare stated the £300 figure was based on the average standard variable rate (SVR) currently standing at 7.13%. Calculations were based on a £250,000 mortgage over a 25-year term on a repayment basis. SVR repayment £1,787 per month, versus £1,502 per month on 5.28% two-year fixed rate.