Mortgage Rate Update 02/04/26

Daniel Dawes
Apr 2
2 min read

Hi All,

Please see below the latest table of the best available purchase rates across the main mortgage options and loan to value(LTV) bands.

Rates have now risen for a fourth consecutive week, returning to levels last seen in summer 2024. Since the conflict in Iran began, we’ve seen an average increase of 0.89% across all fixed‑rate products, and the shift in the market is becoming more pronounced: 32% of the best rates in the tables below are now above 5%, compared with just 4% in February.

SONIA swap rates, the wholesale rates lenders use to price fixed mortgages, have stabilised over the past week, and the 2‑year swap has even edged lower. Importantly, the gap between swap rates and average fixed mortgage rates has widened. This suggests that further mortgage‑rate increases should pause and we may even see small reductions over the next week. This will be highly dependent on oil prices and upcoming economic data, particularly the PMI releases. Any more pressure on inflation expectations could quickly reverse this.

The main force behind recent mortgage‑rate volatility is still energy‑driven inflation risk. Higher oil and gas prices feed directly into inflation expectations, which in turn keep swap rates high. Markets are also adjusting to the Bank of England’s decision to hold rates at 3.75%, signalling caution rather than easing. Until markets are confident that inflation will fall sustainably, lenders will continue to price defensively.

Over the next week, markets will be watching three things closely: oil prices, UK PMI data, and global bond markets. If oil continues to drop from recent highs, swap rates may fall slightly but another spike could trigger further lender repricing. PMI releases will give an early read on economic momentum, stronger figures tend to push inflation expectations(and swap rates) higher, while softer data would help calm markets. Finally, movements in global bond yields, particularly in the US, will influence UK gilt yields and could add upward pressure to mortgage pricing. Lenders are likely to continue tactical, cautious repricing throughout the week.