Several Lenders Cut Mortgage Rates But Warn of Another Spike 

Halifax has followed HSBC and First Direct in cutting fixed mortgage rates. Halifax reduced fixed mortgage rates by up to 0.25 percentage points on 6 May, but mortgage brokers are warning there could be another spike on the way.  

Mortgage rates surged following the start of conflict in Iran but some major lenders have introduced small cuts since the recent peaks. 

The ongoing events in the Middle East has driven fuel and food costs up in the UK, with inflation rising by 3.3% in the 12 months to March 2026. The Bank of England’s Financial Policy Committee voted to maintain the Bank Rate at 3.75% and they expect inflation to be higher later in the year. 

Prior to the Iran war, which began on 28 February 2026, there were expectations that the Bank Rate would fall in 2026, following on from incremental reductions from mid-2024 and through 2025.  

Many people planning to buy a new home or remortgage were optimistic that they would be able to access better mortgage deals later on in the year. However, swap rates have risen sharply due to the Iran war. Swap rates reflect how much it costs lenders to borrow and indicate future interest rate movement. 

Brokers Warn Rate Cuts Could Be Short-lived 

Ken James, director at London-based mortgage broker Contractor Mortgage Services, said the recent cuts were ‘good news on the surface’ but added:  

‘The market underneath is flashing warning lights, because while Halifax is cutting, the cost of funding mortgages is rising fast.’ 

He added: ‘If swaps stay elevated, these rates won’t stick around but for those who can benefit from these cuts, the message is clear – act and don’t dilly-dally.’ 

The uncertainty of the war is leaving many potential homebuyers wondering whether now is the right time to buy, or to hold off to see how events unfold. Mortgage rates have been highly volatile, and lenders have quickly pulled products at short notice.  

Many brokers have urged borrowers to lock in a rate while it is still available, so they have the option to switch to a new one before the deal begins, should better deals come onto the market.