Mortgage rates hit three-year high as Trump vows more strikes

Chris Price. Emma Taggart Economics Reporter. Louis Goss Business reporter

Last updated 02 April 2026 6:14pm BST

Key moments

Wall Street plunges after Trump speech

The US stocks sink after Trump creates confusion on when the Iran war will end

Mortgage rates surge over Iran warAverage rate on five-year fixed deal hits three-year high after Trump speech

Cooper condemns ‘Iranian recklessness’ in Hormuz meetingForeign Secretary convenes meeting with more than 40 countries on reopening strait

Oil prices surge after Trump addressUS crude jumps 11pc as US president gives little clarity on the future of the Strait of Hormuz

Pound drops as Trump vows to intensify strikesSterling wipes out previous day’s rally as US president vows to hit Iran ‘extremely hard’

Mortgage holders face the highest borrowing costs in three years after Donald Trump said he would hit Iran “extremely hard” in his war in the Middle East.

The average mortgage rate on a five-year fixed deal has jumped from 4.95pc at the start of March to 5.78pc on Thursday, the highest level since November 2023, following the president’s latest threats.

Mr Trump said: “We’re going to hit them extremely hard. Over the next two to three weeks, we’re going to bring them back to the stone ages where they belong.”

Typical two-year deals have shot up from 4.83pc last month to 5.89pc, their highest point since July 2024.

Meanwhile money markets are betting that interest rates will rise from 3.75pc to 4.25pc by September as the Bank of England battles soaring inflation caused by the conflict.

Adam French, of data provider Moneyfacts, said: “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.”

Stocks surged and oil prices fell on Wednesday after President Trump suggested the US and Iran were close to reaching a peace deal.

However, his comments on Thursday sent the markets rally into reverse and left Brent crude surging 8pc to $109 per barrel.

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