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Landlords who were expecting to secure a lower mortgage rate should be ready to pay more, as prolonged uncertainty over the US-Iran War threatens the world economy.
Rising energy prices worldwide, plugged into tensions in the Middle East, are likely to push up inflation in the UK and elsewhere.
This may mean ratesetters at the Bank of England will play safe and leave interest rates at the current 3.75 percent for longer, or even raise the rate a little to calm rising prices.
Money markets, especially those trading in government bonds and oil, have already reacted by cutting rates and boosting the price of a barrel of Brent crude from $73 a couple of weeks ago to $103 today (16 March 2026).
Mortgage data monitor Moneyfacts reports the average 2-year fixed residential mortgage rate has nudged up to 5.20% today, from 5.10% three days ago. Rates were 4.84% before the US-Israeli coalition struck Iran.
The average 5-year fixed residential mortgage rate is 5.25 percent, up from 5.19 percent.
The rates reflect that the Bank of England is unlikely to lower rates again this year.
| Product | No of deals | Best deal |
|---|---|---|
| 2 year fixed rate | 1575 | 2.34% - Zephyr Homeloans |
| 3 year fixed rate | 90 | 3.34% - BM Solutions |
| 5 year fixed rate | 1758 | 3.74% The Mortgage Works |
| Best loan-to-value deals | ||
| 60% | 3701 | 2.34% fixed for 2 years - Zephyr Homeloans |
| 75% | 2470 | 2.39% fixed for 2 years - Zephyr Homeloans |
| 85% | 499 | 2.89% fixed for 2 years - Molo Finance |
| Best variable rates | ||
| Discounted variable | 116 | 2.90% for 2 years - Stafford Building Society |
| All variable rates | 146 | 2.90% for 2 years - Stafford Building Society |
| Best corporate deal | 10 | 3.89% fixed for 2 years - Molo Finance |
| Best first-time landlord deal | 10 | 4.09% fixed until May 2031- HSBC |
| All buy-to-let best deal | 2.34% fixed for 2 years - Zephyr Homeloans |
Source: Moneyfacts
An example mortgage is borrowing £170,000 over 25 years on a house valued at £284,000 at an interest rate of 4.58 percent variable for 25 months, reverting to 8.49 percent variable for the term. 25 monthly payments of £648.83 and 275 monthly payments of £1202.75. Total payable £518,201.00 includes loan amount, interest of £346,977, a zero valuation fee and product fees of £999. The overall cost for comparison is 8.2 percent APRC representative.