The Average 2-Year Fixed Mortgage Rate Has Now Surpassed 5%
- Nearly 500 mortgage products have been withdrawn in the past two days, according to data from MoneyFacts (12 March 2026);
- This marks the most significant number of rate withdrawals since the mini-budget in September 2022;
- Data from the FCA, the UK's independent financial regulator, reveals that 1.2 million mortgage holders have fixed-rate deals expiring within the next six months;
- Mortgage borrowers can typically secure a new rate up to six months in advance, with the option to switch later if a more favourable deal becomes available.
Oil Price Rises Stoke Inflation & Interest Rate Risk
Before the recent conflict, financial markets were anticipating a UK interest rate cut this year. However, rising oil prices have shifted this outlook, raising concerns about higher inflation. This volatility is affecting Government bond yields, which influence borrowing costs.
"Recent days have been some of the most turbulent in the UK mortgage market since the aftermath of the September 2022 mini-Budget," noted Adam French from Moneyfacts.
French explained that the hope for falling mortgage rates has been replaced by rate rises. The extent of these increases will depend on how global markets and inflation respond to the conflict in the Middle East.
The Bank of England had been expected to lower the Base Rate from 3.75 per cent when it meets next week (19 March 2026) but economists and financial markets now think this is unlikely. The Bank uses the Bank Rate (or 'Base Rate') to keep the consumer prices index measure of inflation as close to 2 per cent as possible. The higher the rate of inflation, the more likely Bank Rate is to stay steady or even go up.
Lenders, in consequence, are adjusting their mortgage rates now, and withdrawing cheaper deals apace, in anticipation of news on the aforementioned Bank of England's benchmark rate, which sets the standard for borrowing costs.
What Does This Mean for Mortgage Borrowers?
In short, mortgage borrowers choice of mortgage deals has been reduced; and what remain are increasing in cost:
As of 12 March 2026, MoneyFacts data demonstrates:
- The average rate on a 2-year fixed deal stood at 5.01%, up from 4.84% on Friday 06 March 2026;
- Over the same period, the average rate on a 5-year fixed deal has risen from 4.96% to 5.09%;
- Over the past two days, 472 residential mortgage products have been withdrawn from the market.
Protect Yourself from Further Rate Rises
If your current mortgage deal is ending soon, now is the time to speak with a mortgage broker to explore your options and secure a new product.
Locking in a rate today can protect you from potential rate increases before your new deal is finalised. Should rates fall, you often have the flexibility to reapply for a more favourable offer, giving you peace of mind. Mortgage offers from most lenders are typically valid for three to six months, as long as your circumstances don't change, and you aren't committed until you formally accept.
Even if your remortgage isn't urgent, reviewing your situation is still worthwhile. While early repayment charges may apply, the savings from a new deal can sometimes outweigh these costs, especially if sudden rate hikes increase your monthly payments or if you need to borrow more for home improvements.
Obligation-Free Mortgage Advice from Cleerly
In today's unpredictable mortgage market, waiting could be costly. Although no one can predict future interest rate movements, taking proactive steps now gives you greater control and security.
Whether you're a first-time buyer, planning to move, or looking to remortgage, seeking early, professional advice from a trusted, whole-of-market broker like Cleerly is key to protecting your financial interests.
Our expert mortgage team is here to provide clear, tailored guidance to help you secure the most suitable mortgage for your needs. Your financial wellbeing is our top priority. Don’t wait for the market to shift: contact Cleerly today to confidently discuss your mortgage options.