- The Middle East conflict has caused 4% mortgage deals to vanish from the UK residential market, with rates rising significantly due to soaring swap rates, not the Bank of England's base rate.
- For instance, a two-year fixed mortgage rate climbed from 3.67% to 4.37% since the conflict began, increasing monthly payments by over £96 for a £250,000 mortgage.
- Lenders have pulled lower-rate offerings amid intense volatility in the swap market, leading some mortgage brokers to suggest tracker products as a temporary solution.
- The Bank of England's expected interest rate cuts are now uncertain due to rising inflation concerns, exacerbated by the conflict's impact on oil prices, raising fears of stagflation.
- The future of mortgage rates depends on the conflict's resolution; a swift peace deal could see rates fall, while a prolonged conflict risks challenging borrowing conditions and further economic drag.
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