Average Mortgage Rates Fall — First Drop Since Iran War

For the first time since the war in Iran broke out on 28 February 2026, average UK fixed mortgage rates have fallen, according to the latest data from Moneyfacts.

• The average two-year fix dropped 3bps to 5.87% over the past week.
• The average three-year fix fell 5bps to 5.50%.
• The average five-year fix edged down 2bps to 5.76% from 5.78% last Friday.

Some categories saw steeper cuts. Three-year fixes at 95% LTV fell 13bps to 5.98%, and 85% LTV deals dropped 9bps to 5.53%. Two-year fixes at 70% LTV fell 9bps to 5.58%, while 95% LTV deals dropped 8bps to 6.40%.

For broader context, see our analysis of whether the ceasefire would bring rates down and the ongoing oil crisis.

Moneyfacts personal finance expert Rachel Springall linked the move to recent swap rate activity following the Middle East ceasefire: "Lenders have been reviewing their rates in line with recent swap rate moves, which are hovering around 4%. Prior to the recent ceasefire, there was a notable rise in swap rates, and growing speculation for an interest rate hike by the Bank of England."

Swap rates are the wholesale benchmarks lenders use to price fixed-rate mortgages. When they ease, fixed deals tend to follow — though Springall warned: "The future path of interest rates remains murky, and short-term respites can change quickly."

The Bank of England base rate is currently held at 3.75% — see our coverage of that decision. Markets are still divided on whether the next move is a cut or a hike.

A wide cross-section of the market repriced — most downwards. Notable cuts came from HSBC, Lloyds Bank and Santander, alongside Atom Bank, Halifax, TSB and The Co-operative Bank. A few lenders, including Kensington and Principality Building Society, increased rates.

Headline lender moves this week:

• Halifax — reduced by up to 35bps
• Lloyds Bank — reduced by up to 35bps
• Family Building Society — reduced by up to 35bps
• HSBC — reduced by up to 34bps
• Atom Bank — reduced by up to 25bps
• AIB (NI) — reduced by up to 23bps
• Newcastle Building Society — reduced by up to 21bps
• Foundation, Leek, Nottingham BS — reduced by up to 20bps
• Coventry BS — cut by up to 5bps, raised by up to 18bps
• Kensington — increased by up to 20bps
• Principality BS — increased by up to 23bps

Springall flagged one big lender to watch: "It will be interesting to see if Barclays will decide to make a move to cut rates as they have not adjusted their residential mortgage rates since the start of April." Compare today's deals on our best rates page, or browse individual lender hubs like HSBC, Halifax, Santander, Barclays and Nationwide.

Alongside rate cuts, product availability has expanded sharply for borrowers with smaller deposits. Building societies have led the way:

• Cambridge Building Society launched new products at 98% LTV
• Saffron Building Society introduced new 95% LTV ranges
• Leeds Building Society expanded its 95% LTV range

Springall called the move "a ray of light", adding: "Mutuals do more than just competitively price their products, they are champions of innovation and work incredibly hard to support first-time buyers with very small deposits."

If you're buying with a 5% or 10% deposit, our first-time buyer service, deposit guide and LTV explainer are good starting points. For 100% deposit-free options, see our no-deposit mortgage page.

One week of falls doesn't mark a trend — but it is the first easing since the conflict began, and a clear sign that swap markets have stabilised. For borrowers, the practical takeaways:

1. Don't wait for big drops. Cuts are measured in single-digit basis points. If your deal is ending in the next 6 months, it's worth securing a rate now and reviewing again before completion. Read our remortgage guide.
2. High-LTV borrowers benefit most. The biggest reductions were at 85–95% LTV — exactly where first-time buyers and limited-equity remortgagers sit.
3. Watch swap rates, not headlines. Swaps near 4% are keeping fixed pricing where it is. Any escalation in the Middle East or surprise inflation print could reverse this quickly.
4. Get advice early. Our remortgage advisers can hold a rate now and switch you to a cheaper deal if pricing improves before completion.

Speak to a fee-free adviser at The Mortgage Genie, or get a personalised quote in minutes.