Borrowers are facing renewed uncertainty as lenders reprice mortgages in response to volatile swap rates according to analysis from Moneyfactscompare.co.uk.
Major high street lenders including Barclays, HSBC, Lloyds Bank, NatWest and Santander have cut selected fixed rates in recent weeks, aligning pricing with market movements.
However, the broader trend remains mixed. Average mortgage rates across 2-, 5- and 10-year fixes have all risen year-on-year, with the average 10-year fixed breaching 6% at the start of April for the first time since July 2024.
The volatility follows a sharp shift in rate expectations, with markets now pricing in higher rates for longer. Moneyfacts said its average mortgage rate recorded its biggest monthly increase since July 2023.
SMALL BENEFITS
Despite the Bank of England cutting the base rate to 3.75% in December 2025, borrowers have seen limited benefit. Standard variable rates have fallen by just 0.14% since then, highlighting a lag in transmission.
Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, says: “Borrowers have been left in limbo as it is difficult to know whether they should rush to lock into a fixed deal or wait and see if lenders make more sizeable cuts.
“Unfortunately, the outlook on interest rates remains uncertain, so mortgage holders coming off a cheap fixed rate will have to cover higher repayments this year, which will be incredibly frustrating. It is still worth moving off an expensive revert rate, as borrowers could save almost £2,500 a year moving onto a fixed rate deal*.
“The Bank of England refuses to rush any decisions, and with fears of a recession already creeping in, it looks like stagflation has thrown out any plans for cuts this year.”
MORTGAGE MAYHEM
She adds: “Economists expect the BOE base rate to hold in the short-term, and it’s looking increasingly unlikely we will see a cut until 2027.
“However, borrowers will hope that the mortgage mayhem experienced over recent weeks will calm, but repricing could go both ways amid swap rate moves.
“Mortgage rate hikes have been driven by the conflict in the Middle East, where the disruption of supply chains has created muddied waters for the future path of inflation and interest rate setting.”
LITTLE SCOPE FOR RATE DROPS
And she went on to say: “Increasing pressures on households have the potential to echo the shocks felt by the UK during the summer of 2023, so the biggest concern for consumers will be how long they need to endure it, particularly for those looking to buy a home or remortgage, as mortgage rates have risen significantly in a short space of time.
“Lenders will be watching the decision by the Monetary Policy Committee (MPC) very closely, as it would be unwise to price deals too low in the short-term, so they will react if swap rates start rising significantly again.
“Lenders will be looking to reprice to catch up to higher swap rates over the coming days, but also to compete for new business, it’s all in the margins. Until the market sees more stability, there is very little scope for lenders to drop rates substantially due to the prolonged unrest in the Middle East.”
Moneyfacts says ongoing geopolitical uncertainty and inflation risks mean further rate movements remain finely balanced, leaving borrowers weighing up whether to fix now or wait for clearer signals.
