The lowest available two-year fixed deal before the start of the conflict was 3.51%, but this has now jumped to 4.6%, according to Moneyfacts. That equates to an increase of £151 a month, or £1,812 a year. This is on the lowest possible rate. Average rates are now around 5%, figures suggest, with many lenders announcing increases this week to more than 6%, leaving homeowners as much as £4,300 worse off annually.
Jinesh Vohra, CEO of Sprive, urged homeowners to review their existing deal if it’s coming up for renewal, and consider overpaying where possible to “mitigate the impact of rising borrowing costs”.
He said: “The jump in rates in just a few weeks shows how quickly global events can ripple through the mortgage market and expose homeowners to higher costs.
“With rates going past 5% last week and now many creeping over 6%, the impact is immediate for those looking to buy, remortgage, or sell.
“When markets react like this, lenders often pull back or tighten criteria, leaving borrowers with fewer options almost overnight. Homeowners need to act proactively: review their deals early, lock in fixed rates where possible, and overpay if they can to reduce interest costs.”
The expert added: “In a market like this, homeowners who stay proactive are the ones who benefit most.”
The Foreign Secretary, Yvette Cooper, said on Thursday: “We’ve taken a different view from the US from early on and we didn’t get drawn into offensive action in the Middle East, because we thought that there were real concerns about escalation risks, impact – including on the economy – and also the need for a proper plan.”
She added that a co-ordinated action was needed as Iran’s “reckless strikes” on international shipping and efforts to “hijack the global economy” were hitting nations “from across the globe who played no part in this conflict”.
“That’s affecting petrol prices and mortgage rates here in the UK, but also jet fuel across the world, fertiliser to Africa, and also gas to Asia,” Ms Cooper said.
“So countries across the world being impacted, and that’s why we’re so determined to see every possible diplomatic, economic and co-ordinated measure to get the strait reopened.”