The average two-year fixed rate has jumped again to hit 5.89% this morning – an increase of 5 basis points since yesterday and of 106bps since the outbreak of war.

Before the air strikes on Iran in late February, the rate stood at 4.83%, data from Moneyfacts shows.

The mortgage rate shock has been the sharpest since the aftermath of the Liz Truss mini-Budget in September 2022.

However, this month’s hike in costs has not been as rapid as it was then, when rates leapt by 181bps in a single week.

The average five-year fixed is now 5.78%, up from 5.75% yesterday and from 4.95% a month ago.

Mortgage availability has shrunk dramatically, with 1,283 fewer products available now than there were earlier in March.

Then borrowers could choose from 7,484 deals, whereas now there are 6,201– a contraction of 17%.

Borrowers coming to the end of five-year fixed rates are likely to be hardest hit as average rates are up by more than 307bps since they took their previous deal.

This means repayments on a £250,000 mortgage would be more than £430 per month higher and or an extra £5,130 per year.

Moneyfacts head of consumer finance Adam French says: “The conflict in Iran quickly upended rate expectations and sent borrowing costs skyrocketing in the biggest shock to the UK mortgage market since the aftermath of the 2022 mini-Budget.

“While it falls short of the extreme jumps seen then, it is still a sharp and sudden shift that has materially worsened affordability in a very short space of time.

“For many borrowers, the cost could be significant. 

“Someone taking out a typical two-year fix will find it costs £150 more per month on average compared to just a few weeks ago. 

“However, the real payment shock will be felt by those coming off older five-year deals, where rates have more than doubled, pushing up repayments by many hundreds of pounds per month.

“The combination of rising rates, reduced choice and heightened volatility means borrowers and brokers are operating in a market where timing is critical and the window to secure competitive deals can be very short-lived.”