Hopes of mortgage rates steadily easing have “collapsed”, with at least 530 homeowner mortgage deals having vanished from the market since Monday, according to a financial information website.

Moneyfacts said the number of mortgages disappearing from the market since then represents about 7.5% of deals. Some average mortgage rates have already broken through the 5% mark amid changing financial markets, and Moneyfacts said earlier this week that mortgage deals have been withdrawn at the fastest pace since the 2022 mini-budget.

Moneyfacts said on Friday that the average two-year homeowner mortgage rate on the market was 5.10% – up from 4.87% on Monday. The rate is at its highest since July 2025.

The average five-year homeowner mortgage rate on Friday was 5.19%. This was up from 4.98% on Monday and the highest since April 2025.

Adam French, head of consumer finance at Moneyfacts, said even the cheapest rates are shooting higher, adding: “It’s unwelcome news for borrowers, as hopes of steadily falling mortgage rates have collapsed and given way to a much more uncertain outlook.

“The destination is now heavily dependent on how global markets and inflation expectations evolve in response to the conflict in the Middle East.”

Markets were sent into turmoil after the US and Israel launched wide-ranging strikes on Iran on February 28.

Iran responded with its own attacks on Israel and US-allied states in the Gulf, forcing the closure of the Strait of Hormuz, which accounts for around 20% of global oil and gas supply.

This has prompted some of the largest oil and gas producers to suspend production, driving oil prices to as high as $120 a barrel on Monday.

Swap rates – the interest rates lenders pay to financial institutions to secure fixed-rate funds – are nearly as high as they were a year ago. On Thursday, the five-year swap rate was 3.918%, up from 3.787% on Wednesday, and up from 3.647% a month ago. One year ago, it was 3.931%.

NatWest announced up to 0.25% mortgage rate rises across the board today, while Barclays has hiked rates by up to 0.3%.

Martin Rayner, director at Compton Financial Services, said: “Rising swap rates lead to higher mortgage rates and also signal that markets expect interest rates to stay higher for longer, which can reduce affordability for borrowers and increase borrowing costs for businesses, potentially slowing housing activity and wider economic growth.

“Markets are becoming less confident that interest rates will fall soon, with geopolitical tensions and inflation risks pushing expectations towards rates staying higher for longer.”

Bob Singh, founder at Uxbridge-based Chess Mortgages, said the fear is that inflation will rise. He added: “In this world we live in, nothing is straightforward and nothing is predictable. We have seen the world turned upside down by the recent events in the Middle East. These geopolitical tensions have undone the good done over the last year when we saw inflation and base rates fall.

“Confidence was increasing, and banks were happy to lend more to homebuyers. Right now, the landscape looks rather shaky. The drones have not only hit Tehran but also our economy. Swap rates have edged up to 2025 levels, undoing the gradual decline in rates.

“With the spectre of inflation rising again, there is now a real prospect that rates will be higher for longer. First-time buyers will once again be in a quandary: buy now or wait. Brokers will have to be on their toes in the coming weeks.”

Steven Greenall, mortgage and protection advisor at Rayleigh-based Protect & Lend, suggested swap rate rises will slow the housing market.

He added: “The recent pressure on swap rates brought on by a surge in energy prices due to the tension in the Middle East has led to lenders swiftly increasing mortgage rates. It’s not good for an already turgid economy and will further slow the housing market.

“Will this lead to the Bank of England having to do a U-turn with the base rates and being forced to increase them instead of continuing on their easing path? We haven’t seen enough U-turns on policy recently, have we?”