Mortgage rates just jumped. Again.
The cost of petrol has rocketed up, swap rates are spiking, and lenders are hiking and pulling deals with basically no notice. If you've been watching the mortgage market and hoping for calm, this week was the opposite of that.
!House and keys on a table to symbolise rising mortgage rates
Photo by Tierra Mallorca on Unsplash
TSB hiked rates twice in a single day. Barclays, Santander, and Halifax followed with their own repricing. The average five-year fixed is now sitting around 5.03%, the average two-year fix around 4.93%, and five-year swap rates are above 4% for the first time in a year.
For anyone mid-application — or watching from the sidelines wondering when to move — this mortgage rate increase matters. Here's what's actually driving it, and what I'm doing about my own buy-to-let right now.
Why Mortgage Rates Are Rising Right Now
When oil prices go above $100 a barrel it sends a signal to the markets: inflation is about to get sticky again. High energy costs push up the price of everything — bread, petrol, heating — and when inflation looks like it's going to stick around, the Bank of England is far less likely to cut the base rate.
A few weeks ago there was real hope for a base rate cut in March. Now traders are pricing in just a 31% chance of any cuts at all this year. That shift is why mortgage rates are moving so fast.
The mechanism looks like this:
This mortgage rate increase is already hitting deals on the market right now.
What I'm Doing Mid-Application
I'm treating this mortgage rate spike like a stress test. If the deal still works at the new numbers, great. If it doesn't, better to know now than after I've sunk more time and money into it. It is a pain though, my preferred lender just swept the proverbial rug out from under my feet when they pulled my preferred 0 fee products.
Move fast — because lenders are
If you already have a previous rate secured, move fast to get the deal over the line so you don't lose it. It could take a while for this current storm to pass, and last months numbers are suddenly looking quite good.
Fix vs wait — decide on risk
When tracker mortgages come up, it's a sign that rates are quite high.
Despite this, I'm still leaning two or five-year fix because I want predictable payments, a clearer yield picture, and less exposure to the next headline-driven rate hike. The investor question isn't "can I afford this month?" — it's "does it still stack up if rates stay higher for longer, with a buffer for repairs, voids, and life?"
Use a broker — the market is moving too fast for DIY
Comparison sites cannot keep up with the pace of product pulls right now. A good mortgage broker can flag rate changes early (sometimes you get hours of warning), tell you what lenders are tightening on — affordability criteria, rental coverage ratios, stress tests — and sense-check whether the deal still works after a swap-rate-driven reprice.
If you don't have a broker, Unbiased is where I'd start — you can find a whole-of-market broker who can see deals you can't access directly.
What If You're Due for Renewal?
If your current mortgage deal ends in the next six months, don't wait.
Most lenders let you book a new rate up to six months ahead. You can lock in now as an insurance policy. If rates fall before your deal ends, you can usually switch to the cheaper one. If they keep climbing, you'll be relieved you moved when you did.
The average two-year fix sitting under 5% feels painful compared to the 2% era, but it's a lot better than the 6–7% peaks we saw not long ago.
The Honest Answer to "Should I Fix Now?"
It depends on what you're trying to protect.
If you need certainty — for cashflow planning, portfolio decisions, or just your own sanity — fixing now at a rate that still works makes sense. Waiting for rates to fall is a bet, and right now the data is pointing the wrong way.
If you're flexible and can absorb movement, a tracker or short fix could still work. But be honest with yourself about your risk tolerance. "I think rates will fall" is a very different thing to "I can afford it if they don't."
A Final Thought
Property is hard work to be honest, and we can't control the price of a barrel of oil. We can, however, control how prepared we are — credit score, paperwork ready, broker in place, and a clear-eyed view of what the numbers actually look like at today's rates.
I'll keep updating as my own application moves forward. If you're mid-process too, let me know how you're getting on.
More on mortgages and property:
- Self-employed mortgage guide — what lenders actually want to see
- Loan to value explained — and why it matters more than you think
This post is for informational purposes only and does not constitute financial advice. Mortgage rates change frequently — always check current rates with a broker or lender directly. Some links in this post are affiliate or referral links. For personalised mortgage advice, speak to a regulated adviser via Unbiased.
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