Sub-4% fixed-rate mortgages have disappeared from the market following a wave of repricing by major lenders, leaving landlords facing higher borrowing costs as they deal with the run-up to the Renters Rights Act.
Analysis from Moneyfactscompare.co.uk shows all major banks – including Barclays, HSBC, Lloyds Bank, NatWest and Santander – have increased mortgage rates since the start of March, removing sub-4% deals that were still available just a week earlier.
Average rates climb back above 5%
The shift has pushed average two-year and five-year fixed rates back above 5%, with current averages at 5.28% and 5.32% respectively. The last time both rates consistently exceeded 4% was February 2025.
Despite the Bank of England cutting the base rate to 3.75% in December 2025, the reduction has not fed through to mortgage pricing. Average standard variable rates have fallen only slightly, while the overall average mortgage rate – which dropped below 5% last month – has climbed back above that threshold.
This follows Residential Landlord’s earlier report on Middle East conflict affecting rate cut expectations, with geopolitical uncertainty continuing to drive swap rate volatility.
Global pressures blamed for repricing
Rachel Springall, finance commentator at Moneyfactscompare.co.uk, said: “Borrowers looking for the lowest fixed rates will be disappointed to see the demise of sub-4% mortgages, but they are not sustainable with swap rates increasing.”
She added: “Mortgage rates are rising due to global pressures, not UK fiscal policy, so while not ideal, rate increases are not mirroring the mini-Budget fiasco in 2022.”
Springall noted that uncertainty in the Middle East has led to rising swap rates, causing some deals to be pulled temporarily and reducing expectations for a Bank of England base rate cut this month. “If such uncertainty is prolonged, and indeed if inflation spikes, we could even see an increase to BBR before the year is over,” she warned.
For landlords approaching refinancing decisions, the advice is to lock in deals early. “Existing borrowers could lock into a new deal six months in advance,” Springall said, noting that fixing could save around £300 monthly compared to reverting to a standard variable rate. Further analysis is available from Moneyfactscompare.co.uk.
Opinion
The era of sub-4% mortgages lasted just over a year before geopolitical forces pushed rates back up. For landlords already squeezed by rising costs and incoming regulation, the timing could hardly be worse. Those with refinancing deadlines approaching would be wise to act sooner rather than later.
