The last month has been a reminder that mortgage markets rarely move in a straight line.
Towards the end of February, the overall direction of travel still looked relatively positive. A number of lenders were reducing selected products, and average fixed rates were edging down, supported by competition across the market.
At that stage, it felt as though mortgage pricing might continue to ease into the spring.
That changed quickly as we moved into March.
Bank of England and the Economic Backdrop
The Bank of England’s Monetary Policy Committee voted to hold the base rate at 3.75% at its March meeting.
Leading into this decision, there had been some expectation that rates could gradually fall over time, with commentary suggesting the potential for further cuts later in the year depending on economic conditions.
However, the Bank’s position remains cautious, with policy continuing to be driven by inflation, economic data and wider global factors.
Mortgage Rates and Lender Activity
As March began, the direction of travel shifted.
A number of lenders started to increase rates, reversing the reductions seen just weeks earlier. HSBC and Coventry were among the first to lead a new wave of rate increases, followed by further repricing across the market.
As the month progressed, this became more widespread. Lenders continued to reprice upwards, with multiple providers increasing fixed rates across new business and existing customer ranges.
By mid-March, this repricing had become more pronounced.
Average fixed mortgage rates moved back above 5%, and reports highlighted that sub-4% deals were becoming harder to find as swap rates increased and lenders adjusted pricing accordingly.
More recently, further increases have continued as swap rates have edged higher, with lenders including Halifax and Santander also adjusting pricing upwards.
What This Means in Practice
Mortgage rates do not move directly in line with the Bank of England base rate.
March has demonstrated that clearly. While the base rate has remained unchanged at 3.75%, mortgage pricing has increased as lenders respond to changes in swap rates, funding costs and market sentiment.
This has resulted in a market where:
- Rates were reducing towards the end of February
- Then began rising quickly through March
- Sub-4% products became less available
- Average fixed rates moved back above 5%
Short-term repricing has been particularly noticeable, with lenders adjusting rates frequently in response to market conditions.
Our Thoughts
The key theme this month is change in direction.
Only a few weeks ago, the market appeared to be moving gradually towards lower pricing. Since then, rising swap rates and wider market factors have led to a clear shift, with lenders increasing rates across much of the market.
For anyone planning to move or remortgage this year, this reinforces the importance of flexibility.
Securing a suitable rate while retaining the ability to review options if pricing improves can help balance certainty with opportunity.
Mortgage rates remain lower than they were at their peak. However, March has been a reminder that the path is unlikely to be smooth, and short term fluctuations should be expected rather than seen as unusual.
As always, the right approach will depend on individual circumstances, timescales and risk appetite.
Information correct at time of writing – March 2026.
