Nearly 500 mortgages deals for homeowners have been removed by lenders from the market in the past couple of days – the fastest disappearing act since the aftermath of the 2022 mini-budget.
Average mortgage rates have also soared past the 5 per cent mark as lenders scramble to hike their rates for both two- and five-year fixes.
The war on Iran and ensuing turbulence across the Middle East has had a wide-ranging impact already on the global economy, with the price of oil shooting past $100 at one stage before dropping back to $90.
That is likely to have an impact on UK inflation, making it more likely that the Bank of England raises interest rates. The knock-on is that swap rate deals have increased over the past few days, which mortgage products are based on.
As a result, a number of lenders have raised their interest rates on mortgage deals including some of the biggest in the UK. Nationwide, HSBC, NatWest and Santander are among those to do so, while TSB raised theirs twice in the space of a day.
Finance information website Moneyfacts said on Wednesday morning that over the past 48 hours, a total of 472 residential mortgage products had been withdrawn.
This is around 6.5 per cent of the market, it said, with 7,164 deals still to choose from – but added that it was the biggest fall in available mortgage product numbers since Liz Truss’ disastrous mini-budget which saw the bond market almost disintegrate over fears over what the then-prime minister’s plans would do to the economy.
The biggest single day fall for residential mortgages recorded by Moneyfacts was the withdrawal of 935 products on September 27 2022, which it said was a little over 25 per cent of the deals available at the time.
Average mortgage rates on the market are now at levels not seen since last summer.
The average two-year fixed homeowner mortgage rate on Wednesday morning was 5.01 per cent. This is up from 4.84 per cent on Friday last week and the highest level since it was also 5.01 per cent on August 6, 2025.
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The average five-year fixed homeowner mortgage rate on Wednesday morning was 5.09 per cent. This is up from 4.96 per cent on Friday last week and the highest level since it was 5.09 per cent on June 26, 2025.
The overall average Moneyfacts mortgage rate opened on Wednesday morning at 5.04 per cent. This is up from 4.91 per cent on Friday last week and the highest level since August 7 2025, when it was also 5.04 per cent.
Adam French, head of consumer finance at Moneyfactscompare.co.uk, said: “Recent days have been some of the most turbulent in the UK mortgage market since the aftermath of the September 2022 mini-budget.
“In the last 48 hours, almost 500 residential mortgage products have been withdrawn as lenders reacted to rapidly rising swap rates. However, the scale is nowhere near the shock seen in late September 2022 when 935 products, which accounted for more than a quarter of the market at the time, disappeared in a single day.
“Many of these deals are likely to return within the next few days and weeks as lenders adjust their pricing to higher rate expectations.
“Moneyfacts average mortgage rates have also jumped considerably higher, with the typical two-year fixed rate now at 5.01% for the first time since August 2025 and the average five-year fix surging past 5% to reach 5.09%.
“It’s unwelcome news for borrowers, as the prospect of falling mortgage rates has quickly given way to rate rises. How far they could go is now heavily dependent on how global markets and inflation expectations evolve as conflict in the Middle East unfolds.”
Additional reporting by PA
