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Mortgage rates climb as sub-4% deals disappear from market


Mortgage Advice Bureau has reported a 19.6% revenue increase for the year ending 31st December 2025, as mortgage rates across the UK market rise sharply in response to geopolitical tensions.

The company’s founder and chief executive Peter Brodnicki said the firm’s diversified client base across estate agency, new build developments and corporate partnerships provides consistent lead generation “regardless of housing or economic cycles”.

Sharp rate increases

According to data from Moneyfacts, the average two-year fixed rate mortgage has increased from 4.83% at the start of March to 5.28%, with sub-4% deals now absent from the market.

Adam French, head of consumer finance at Moneyfacts, said: “War in the Middle East has added almost £800 to a typical annual mortgage bill in just two weeks, which will be unwelcome news for anyone currently seeking a fixed rate deal.”

The rate increases come at a time when approximately two-thirds of UK mortgage transactions are refinancing deals, which Brodnicki noted “continue regardless of economic conditions”.

Market impact

Mary-Lou Press, president of NAEA Propertymark, said the loss of sub-4% fixed rate mortgages would be particularly challenging for first-time buyers facing affordability pressures.

“This shift highlights how sensitive mortgage rates are to wider economic uncertainty, making it harder for people to plan and potentially slowing activity across the housing market,” Press said.

She added that even small rate increases can significantly impact borrowing capacity and monthly costs, and that improving long-term affordability requires increasing housing supply rather than relying solely on favourable mortgage rates.

Outlook

Brodnicki said the company plans to continue growth through organic expansion, acquisitions and increased use of technology and data analytics. He described the structural opportunity in the mortgage market as “compelling” despite current geopolitical conditions.



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