Spring 2026 Market Update: How Global Events Are Affecting Rates

The mortgage market has settled compared with the chaos of a couple of years ago – but it’s still far from boring. Recent events overseas, particularly the ongoing conflict in the Middle East, have reminded everyone how quickly things can change.

In this update, we’ll explain what’s happening in the mortgage market right now, how global events are feeding through to interest rates, and what this means if you’re buying, remortgaging or reviewing your portfolio.

Where the UK Mortgage Market Is Now

At the start of 2026, many analysts were talking about a much healthier outlook for the UK mortgage market. Rates had eased from the peaks seen after the 2022 mini-Budget, and product choice was the best it had been in years. Lenders and commentators even described the stage as being set for a more “booming” market, with stronger demand and more competition on pricing.

Forecasts for mortgage lending this year point to modest growth rather than a dramatic boom. A lot of that growth is expected to come from remortgaging and product transfers, as borrowers roll off deals agreed in the higher-rate environment of 2023–24 and look for better options.

Day-to-day, the market feels calmer than it did during the worst of the volatility, but it’s still sensitive. Pricing can move quickly and affordability tests remain tight, especially for higher-value borrowing, complex income and landlords.

The Recent Shock: War and Rate Spikes

The latest conflict in the Middle East has added a new layer of uncertainty. Even though it’s happening far from the UK, it affects the mortgage market here in a few important ways.

When the conflict escalated, financial markets reacted swiftly. Energy prices jumped, investors worried that inflation would stay higher for longer, and the cost of the “swap rates” that lenders use to price fixed-rate mortgages rose sharply.

In response, lenders rapidly repriced:

A significant number of mortgage products were withdrawn in a short space of time.
Average rates on new 2- and 5-year fixed deals moved higher in a matter of days, not months.
Some of the most competitive deals simply disappeared while lenders reassessed their risk and funding costs.

For borrowers and introducers, it felt like the rug was briefly pulled again: one week a rate was available, the next week it was gone.

How War and Global Events Filter Through to Your Mortgage

The link between global events and your monthly mortgage payment isn’t always obvious, but the chain is fairly simple:

War or geopolitical tension → higher energy and commodity prices → stubborn inflation → central banks more cautious about cutting rates → higher or “stickier” market rates → lenders reprice mortgages.

When inflation is expected to stay higher for longer, central banks like the Bank of England are less willing to cut base rates quickly. Even if they signal future cuts, they tend to move carefully. Markets then adjust the cost of the funding instruments that underpin fixed-rate mortgages, and lenders pass those changes through into the products you see.

The practical result is that mortgage rates may:

Come down more slowly than people hoped.
Move in short, sharp bursts when there is big news.
Differ significantly between lenders and product types, depending on how each lender views risk.

Are Things Settling Down Again?

There is some good news. As we’ve moved further into 2026, some of the initial market shock has started to ease:

Hopes of de-escalation and more stable energy prices have helped calm markets.
Swap rates have retreated from their recent peaks, giving lenders more room to price competitively.
Many lenders still expect demand for mortgages to rise this year, especially from remortgagers and buyers who have been waiting for more stability.

That doesn’t mean we’re heading back to the ultra-low rates of the past, but it does suggest that the sharpest jumps may be behind us – provided there are no further major shocks.

What This Means If You’re Buying or Remortgaging

In this environment, timing, preparation and advice matter more than ever.

If you’re buying:

It’s worth speaking to a broker early, even before you start viewing seriously.
Getting your documents and affordability position lined up means you can secure a rate quickly when the right property appears.
A broker can help you decide whether to prioritise certainty, for example a longer-term fixed rate, or flexibility, such as lower early repayment charges or better overpayment options.

If you’re remortgaging:

Don’t wait until your current deal ends. We recommend reviewing your options 6–12 months before expiry.
In a volatile market, there may be a short window where a particularly competitive rate is available – having everything ready allows you to move fast.
A good broker will watch the market with you, advise whether it’s worth locking in early, and help you understand the trade-offs between different terms and products.

For portfolio landlords and more complex borrowers, the stakes are even higher. Changes to rates, stress tests and criteria can make a significant difference to cash flow and future plans, so early planning is key.

How McGill Mortgages Is Guiding Clients Through This

At McGill Mortgages, we spend a lot of time tracking how global events and market moves translate into real-world mortgage decisions. Our role is to filter out the noise and give you clear, practical guidance tailored to your situation.

That means:

Keeping a close eye on lenders’ pricing, criteria and appetite for different types of borrowing.
Helping you get “decision-ready” well in advance of key dates, such as the end of a fixed rate.
Talking through the pros and cons of different options in plain English, so you can make confident choices even when the headlines are noisy.

If you’re considering a purchase, remortgage or refinance – or you simply want to sanity-check your current arrangements in light of recent events – we’re here to help.