How far could Trumpflation drive new mortgage average rates?

Adam French, Head of Consumer Finance 01603 476154 Email Adam

How far could 'Trumpflation' drive new mortgage average rates

Moneyfacts’ average two-year fix residential mortgage rate has risen from 4.83% at the start of March to 5.35% today. It’s the highest since March 2025. Adding around an extra £900 per year to the cost of borrowing £250,000 over 25 years.
Moneyfacts’ average five-year fix residential mortgage rate has risen from 4.95% at the start of March to 5.39% today. It’s the highest since July 2024. Adding around an extra £775 per year to the cost of borrowing £250,000 over 25 years.
Two- and five-year swaps are now around 1 percentage point higher than at the start of the conflict and at their highest level in more than a year (January 2025) – to now sit around 4-4.25%. These rates underpin mortgage pricing and reflect market expectations for central bank rates.
Analysis from INTEREST by Moneyfacts*of more than 30 years of historic rates data has found that average mortgage rates stabilise at around 1.5 percentage points above Base Rate.
If the conflict continues to disrupt the global economy, and the Base Rate hits 4-4.25% as markets are predicting, it may mean average rates on new mortgages stabilising at around 5.50% to 5.75%. Given the volatility of events this is subject to change in either direction.
This could add an extra £1,000 - £1,500 per year to the cost of borrowing £250,000 over 25 years compared to the overall Moneyfacts Average Mortgage Rate (4.89%) at the beginning March.

How far could 'Trumpflation' drive new mortgage average rates

Moneyfacts’ average two-year fix residential mortgage rate has risen from 4.83% at the start of March to 5.35% today. It’s the highest since March 2025. Adding around an extra £900 per year to the cost of borrowing £250,000 over 25 years.
Moneyfacts’ average five-year fix residential mortgage rate has risen from 4.95% at the start of March to 5.39% today. It’s the highest since July 2024. Adding around an extra £775 per year to the cost of borrowing £250,000 over 25 years.
Two- and five-year swaps are now around 1 percentage point higher than at the start of the conflict and at their highest level in more than a year (January 2025) – to now sit around 4-4.25%. These rates underpin mortgage pricing and reflect market expectations for central bank rates.
Analysis from INTEREST by Moneyfacts*of more than 30 years of historic rates data has found that average mortgage rates stabilise at around 1.5 percentage points above Base Rate.
If the conflict continues to disrupt the global economy, and the Base Rate hits 4-4.25% as markets are predicting, it may mean average rates on new mortgages stabilising at around 5.50% to 5.75%. Given the volatility of events this is subject to change in either direction.
This could add an extra £1,000 - £1,500 per year to the cost of borrowing £250,000 over 25 years compared to the overall Moneyfacts Average Mortgage Rate (4.89%) at the beginning March.

Adam French, Head of Consumer Finance at Moneyfacts, said:

“Swap rates, which underpin mortgage pricing, have risen sharply following the decision to hold the base rate at 3.75%, with markets interpreting commentary from the Bank of England as leaving the door open to rate rises amid ‘Trumpflation’ fears. With two- and five-year swaps now sitting at their highest level in more than a year, lenders are once again facing higher funding costs, and this will feed through into mortgage pricing.

“Moneyfacts analysis of more than 30 years of historic rates data shows mortgage rates have historically averaged around 1.5 percentage points above Base Rate. If markets continue to price in one or two rate rises, this could see average new mortgage rates stabilise at around 5.50% to 5.75%. That would leave borrowers paying £1,000 to £1,500 more per year on a typical £250,000 mortgage compared to just a few weeks ago.

“While a quicker resolution to the conflict in the Middle East could ease pressure on rates, the reality is that a more volatile world is a more expensive world. Even though the most competitive deals will remain below average, anyone looking to buy or remortgage this year needs to prepare for higher costs than previously expected.”

*Statistical validation of Moneyfacts Rules of Thumb. An empirical analysis of UK monetary policy (1990 – 2025)

- ENDS

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Adam French, Head of Consumer Finance at Moneyfacts, said:

*Statistical validation of Moneyfacts Rules of Thumb. An empirical analysis of UK monetary policy (1990 – 2025)

- ENDS

To receive the latest issue and sign up please visit: https://www.moneyfactsgroup.co.uk/magazines-and-reports/interest/

Have an opinion? Letters to the Editor invited:

interest@moneyfacts.co.uk

Notes to editors

You are welcome to use part or all of this press release, so long as we are sufficiently sourced. We would appreciate a link back to Moneyfactsgroup.co.uk.

Pioneering financial comparison technology for over 35 years, Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, banking, life, pension and investment products in the UK.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

Notes to editors

You are welcome to use part or all of this press release, so long as we are sufficiently sourced. We would appreciate a link back to Moneyfactsgroup.co.uk.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, banking, life, pension and investment products in the UK.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

If you're looking for extra comment, a chart or more information, then please give us a call. We are always more than happy to help.

Adam French Head of Consumer Finance

01603 476154

Email Adam

Rachel Springall Finance Expert

01603 476210

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Caitlyn Eastell Personal Finance Analyst