UK and US Mortgage Rates Surge Amid Iran Conflict

Average mortgage rates in the United Kingdom and United States surged during the second week of March 2026, triggered by market instability following military action in Iran. In the UK, average two-year fixed residential rates rose to 5.01% by March 11, while five-year rates hit 5.09%. Major lenders including Barclays, HSBC, NatWest, and Nationwide Building Society implemented rate hikes and withdrew approximately 500 mortgage products over 48 hours, marking the sharpest decline in availability since the 2022 mini-budget.

Lenders such as TSB and Principality Building Society raised pricing by up to 0.5%, while NatWest introduced increases averaging 0.25% across purchase and buy-to-let ranges effective March 13. UK Finance reported that 1.8 million fixed-rate mortgages are scheduled to expire in 2026, leaving homeowners vulnerable to these increases. Jatin Patel of Barclays advised homeowners that they could lock in new deals up to 90 days before expiry to protect against short-term volatility.

In the United States, the 30-year fixed rate average climbed from 6.11% to 6.35% by March 12. Analysts noted that rates passed a 6.25% structural dead zone, causing larger price jumps. The volatility is attributed to rising swap rates and Treasury yields driven by inflation risks and higher oil prices. Some analysts warn that lasting damage to Gulf energy infrastructure could keep mortgage rates elevated through 2027.