What's happened
As of mid-March 2026, mortgage rates in the UK and US have risen sharply due to global market volatility linked to the Middle East conflict. UK lenders have withdrawn nearly 700 mortgage deals, pushing average rates above 5%, while US 30-year fixed rates climbed back to 6.11%. Rising energy prices and inflation concerns are dampening housing market recovery and affordability.
What's behind the headline?
Rising Rates Reflect Geopolitical and Economic Pressures
Mortgage rates in both the UK and US are climbing due to the ripple effects of the Middle East conflict, which has driven oil prices above $100 per barrel and reignited inflation concerns. This geopolitical tension has increased bond yields, a key benchmark for mortgage pricing, reversing earlier gains in affordability.
UK Market Volatility and Deal Withdrawals
UK lenders have pulled nearly 700 mortgage deals, the fastest pace since the 2022 mini-budget turmoil, as average two- and five-year fixed rates surpass 5%. This rapid withdrawal signals lenders' caution amid uncertain inflation and economic growth prospects, with the UK economy showing zero GDP growth in January 2026.
US Rates Climb but Remain Below Peak
In the US, the average 30-year fixed mortgage rate rose to 6.11%, up from below 6% just weeks prior, though still below the 7.8% peak in late 2023. While this rise dampens buyer confidence, rates remain relatively moderate compared to recent highs.
Affordability Challenges Persist Globally
First-time buyers in Australia face prolonged deposit saving times and high repayment burdens, reflecting a global trend of housing affordability stress exacerbated by rising borrowing costs.
Outlook
Mortgage rates will likely remain elevated as inflationary pressures persist and geopolitical risks continue. This environment will constrain housing market recovery, keeping many potential buyers sidelined and pressuring affordability. Central banks may delay rate cuts despite weak growth, prioritizing inflation control amid uncertainty.
What the papers say
The Independent's Vicky Shaw highlights the rapid withdrawal of nearly 700 UK mortgage deals in response to rising rates, noting this is the fastest pace since the 2022 mini-budget and that average two-year rates have climbed above 5%, the highest since August 2025. Shaw quotes Adam French of Moneyfacts, who warns that the outlook depends heavily on global markets and inflation amid the Middle East conflict. The Guardian's Zoe Wood also reports on the UK mortgage rate rise and deal withdrawals linked to the conflict.
In the US, the New York Times' Gregory Schmidt and AP News report that the average 30-year fixed mortgage rate rose to 6.11%, reversing a recent dip below 6%. Schmidt notes that while rates remain below their 2023 peak, the recent uptick adds to buyer uncertainty amid geopolitical and economic instability. AP News explains that mortgage rates track the 10-year Treasury yield, which has risen due to inflation fears driven by higher oil prices.
Business Insider UK’s Huileng Tan provides a broader perspective on US mortgage affordability, noting that lower rates have increased refinancing activity but have yet to significantly boost homebuying, with affordability pressures easing only slightly due to flat median home prices and expected wage growth.
Australian broadcaster SBS reports on the challenges facing first-time buyers, with rising home prices outpacing wage growth and deposit saving times extending to several years, despite government schemes to ease entry. Patricia Nicula’s story illustrates the personal impact of these affordability constraints.
Together, these sources paint a picture of a global housing market grappling with rising borrowing costs amid geopolitical tensions, inflationary pressures, and economic uncertainty.
How we got here
Mortgage rates had been trending downward earlier in 2026, with US 30-year fixed rates briefly dipping below 6% for the first time since 2022. However, the outbreak of conflict in the Middle East in early March triggered a spike in oil prices and inflation fears, causing bond yields and mortgage rates to rise again. UK mortgage lenders responded by rapidly withdrawing deals amid market uncertainty.
Go deeper
- Why are mortgage rates rising in the UK and US?
- How is the Middle East conflict affecting global mortgage markets?
- What impact do rising mortgage rates have on first-time homebuyers?
Common question
-
Why Are US Mortgage Rates Rising Again?
Mortgage rates in the US have recently increased to 6.11%, reversing previous declines. This rise is driven by bond market movements, geopolitical tensions, and inflation concerns. Many homebuyers and investors are wondering how these changes will impact the housing market this spring. Below, we answer common questions about the current mortgage rate trends and what they mean for you.
-
Why Are Mortgage Rates Rising Now?
Mortgage rates in the UK and US are climbing sharply due to ongoing geopolitical tensions, especially in the Middle East. This increase is affecting home loans, making borrowing more expensive and impacting housing markets. Curious about what’s driving these changes and what it means for buyers and homeowners? Below, we answer common questions about the current rise in mortgage rates and how global conflicts influence local markets.
-
How Do Middle East Conflicts Impact Global Markets?
Geopolitical tensions in the Middle East are having far-reaching effects on global markets. From rising mortgage rates to increased government spending, these conflicts influence economic stability worldwide. Curious about how regional tensions translate into everyday financial changes? Below, we explore key questions about the broader impact of Middle East conflicts on global economies and what it means for you.
-
How Is the Middle East Conflict Affecting the Housing Market and Economy?
Global conflicts like the Middle East war are having a significant impact on the economy and housing markets worldwide. Rising energy prices, higher mortgage rates, and economic uncertainty are just some of the effects. If you're wondering how these geopolitical tensions could influence your finances, home buying, or property investments, you're in the right place. Below, we answer common questions about these developments and what they mean for you.
More on these topics
-
The Federal Home Loan Mortgage Corporation, known as Freddie Mac, is a public government-sponsored enterprise, headquartered in Tysons Corner, Virginia.
-
The National Association of Realtors, whose member brokers are known as Realtors, is a North American trade association for those who work in the real estate industry.