Your monthly mortgage payment just got more expensive. The average two-year fixed residential mortgage rate hit 5.43% on Monday 23 March, up from 5.35% on Friday and 4.83% at the start of March, according to the Guardian citing Moneyfacts data. Hundreds of deals have vanished from the market overnight.

What Happened to Rates and Deals

The numbers are stark. Residential mortgage products available to borrowers fell from 6,659 on Friday to 6,144 on Monday 23 March - a loss of 515 deals in a single day (Guardian, citing Moneyfacts). The 5.43% average is the highest two-year fixed rate since February 2025.

The trigger? Markets initially priced in four quarter-point rate rises from the Bank of England (BoE) before December, which would take the base rate from 3.75% to 4.75%. After Donald Trump paused his threat to attack Iranian power plants, investors scaled that back to two rises - taking the base rate to 4.25% (Guardian).

But even two rises means lenders keep repricing upward. Nicholas Mendes, an adviser at mortgage broker John Charcol, told the Guardian there would be "further upward pressure on fixed mortgage rates." He said lenders are trying to "keep pace with fast-moving markets." He added: "Mortgage pricing does not wait for the Bank of England to come to [make up its mind]."

Moneyfacts described the impact on the home loans market as "catastrophic" (Guardian).

What the Cost Looks Like

Let me run the numbers on what this means for a typical BTL (buy-to-let) deal.

On a £200,000 interest-only mortgage, the rate move from 4.83% to 5.43% adds £100 a month to your payment. At 4.83%, your monthly cost is £805. At 5.43%, it is £905. That is £1,200 a year in extra interest, straight off your cashflow.

If markets price in more rises and lenders push rates toward 6%, you are looking at £1,000 a month on that same £200,000. Every quarter-point matters.

Where the BoE Stands

The BoE's monetary policy committee (MPC) left the base rate on hold at 3.75% last week but signalled it could raise rates in coming months, according to the Guardian. Rising inflation linked to the Iran conflict is the stated concern - the BoE flagged that UK inflation could be pushed above 3%.

Not everyone agrees rates will rise that far. Goldman Sachs told clients on Friday that UK rate rises this year were "unlikely," and that its economists expect the MPC to hold the base rate at 3.75% throughout 2026 (Guardian). BoE Governor Andrew Bailey also suggested markets were "getting ahead of themselves" in expecting rises this year (Guardian).

Derek Halpenny, head of global markets research for EMEA at MUFG, called the expectation of four rate rises "overdone" (Guardian).

So the picture is split. Markets say rates are going up. Some major banks say they are not. But lenders are not waiting for the BoE to decide - they are repricing now.

What This Means for Your Next Move

If you are mid-application, your deal could be pulled before completion. If you are approaching a remortgage, the rate you saw last week may already be gone. The window is narrowing.

Speak to your broker about what is still available. And if you have not stress-tested your portfolio at a 6% rate, now is a good time to run those numbers.