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Things are changing rapidly (Image: stockphotodirectors via Getty Images)
Borrowers who locked into a mortgage rate in March when rates were far higher than in February have been urged to be ultra-vigilant in the days and weeks ahead if the two-week ceasefire with Iran announced overnight results in an end to the war. Throughout March, mortgage rates shot up rapidly due to events in the Middle East, as inflation concerns grew due to the effective closure of the Strait of Hormuz and the soaring oil price.
Until last night, traders had been expecting the Bank of England to hike rates by as much as one full percentage point in 2026 to contain the expected inflation spike, with prices already spiralling at the pumps. But following the change in the picture has meant traders have instantly adjusted their forecasts for Bank of England rate rises, believing we may now get just one base rate rise in the autumn, or potentially no rise at all this year thanks to the underlying weakness of the UK economy.
Mortgage expert Ranald Mitchell, director at the UK-wide mortgage broker Charwin Mortgages, urged people who locked into a rate in March but have yet to complete – whether on a remortgage or a first purchase – to keep a close eye on the market.
Ranald Mitchell (Image: Newspage)
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He said: “People who locked into a rate in March, when the cost of borrowing shot up at an extraordinary pace, need to be ultra-vigilant, as if de-escalation continues and the war ultimately comes to an end, mortgage rates could soon start coming down again.
“It’s a big if, of course, as the Trump administration is highly unpredictable, but if rates do come down again, borrowers who took out their mortgage direct with their lender in March are highly unlikely to be alerted if a cheaper mortgage rate becomes available with that same lender. Equally, they may not be aware that cheaper rates could become available with another lender.”
Mitchell said too many borrowers were unaware that they can change to another rate, potentially with another lender, all the way up until completion.
He added: “Just because you’ve locked a rate in does not mean you are locked in full stop. If a better rate is announced, either with the same or a different lender, there’s always time to switch, which could save you hundreds or even thousands of pounds in the years ahead.”
He continued: “All too often, people start a new mortgage unaware that they could have got a better rate, and this is where having a broker in your corner can pay serious dividends. A good broker will be scouring the mortgage market for changes and better rates right up until completion.
Mitchell warned borrowers against thinking lenders have their best interests at heart.
He said: “Lenders are commercial, profit-led organisations by default and few will alert you if you could save money through a simple switch to another mortgage product in their range. Doing so, after all, would see them lose money so the onus is on the borrower, or better still their broker, to closely monitor rates. Being on the ball with rates right now has never been more important.”
