Together through adversity – Mortgage Strategy

Just a few weeks ago, the outlook for the mortgage market looked relatively benign.

Swap rates had been easing, lenders were cautiously trimming pricing and many commentators expected the Bank of England to begin cutting the base rate.

Instead, the picture has altered dramatically. Global events have unsettled the markets that underpin mortgage pricing, and the Monetary Policy Committee has chosen to hold base rate once again.

Tensions in the Middle East have pushed energy prices higher and raised fresh concerns about inflation, prompting markets to rethink interest rate movements. Some observers speculate that, rather than three base rate cuts this year as hoped, we’re more likely to see rate rises.

When markets move quickly, borrowers need clear guidance

As a result, swap rates have moved sharply and, when swaps move, mortgage pricing inevitably follows.

The market has seen widespread product changes and withdrawals as lenders adjust to a new funding environment, with hundreds of residential and buy-to-let deals removed. According to the latest Moneyfacts UK Mortgage Trends Treasury Report, the average ‘shelf life’ of a mortgage product fell to just 14 days in March — a sharp drop on February’s average of 33.

For advisers and their clients, this can feel terribly unsettling.

Mortgage products appear and disappear quickly, pricing moves from one day to the next, and the stability that seemed to be returning earlier this year has been interrupted.

Advisers continue to guide customers through an increasingly complex landscape

This volatility reflects the speed with which lenders have to respond when funding costs change. As we have seen many times, movements in swap rates feed quickly through into mortgage pricing, particularly when markets begin to reprice expectations for interest rates.

For lenders, the change in funding costs means products can quickly become unsustainable. When that happens, lenders have little choice but to reprice or withdraw products while they reassess their range.

Not done lightly

None of this is done lightly, and it is not how lenders would choose to operate. Intermediaries introduce the majority of mortgage business, almost 90% by Imla’s calculations, and decisions to withdraw or reprice products are taken only when necessary, usually in response to external market conditions.

These movements in pricing and product availability are feeding through into borrower behaviour.

While two-year fixes have recently been popular as borrowers expected rates to fall quite quickly, there are signs that more customers are opting for five-year fixed rates.

This volatility reflects the speed with which lenders have to respond when funding costs change

Given the uncertainty in the global economy, such a change is understandable. Borrowers are placing greater value on certainty and stability, even if that means accepting a slightly higher rate in the short term.

This trend reflects a more cautious approach from borrowers but, more broadly, the data continues to highlight the resilience of UK mortgage borrowers.

Many households have built up significant equity in their home and benefited from rising income. That combination has helped create a degree of cost-of-living resilience and explains why the mortgage market has remained robust despite higher interest rates.

For advisers and their clients, this can feel terribly unsettling

Against that backdrop, product withdrawals are simply part of how the market adjusts when conditions change. The timing and extent of those changes will vary from lender to lender, but in most cases they are temporary and lenders return quickly with updated products reflecting the new environment.

Choice may narrow briefly during periods of volatility but it usually recovers once markets settle.

It is also worth remembering that the UK mortgage market remains highly competitive. Even during disruption, lenders continue to introduce new products and explore ways of meeting borrower needs. The range of options remains far broader than in previous decades.

Throughout all of this, the role of advisers has never been more important. When markets move quickly, borrowers need clear guidance.

More broadly, the data continues to highlight the resilience of UK mortgage borrowers

The global environment may be uncertain for some time but the fundamentals of the mortgage market remain strong.

Borrowers have shown resilience, lenders remain committed to competitive products, and advisers continue to guide customers through an increasingly complex landscape.

And, if recent years have shown us anything, it is that, in more uncertain markets, the partnership between lenders and advisers becomes even more important in helping borrowers.

Kate Davies is executive director of Imla

This article featured in the April 2026 edition of Mortgage Strategy.

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