Sub-4% Mortgage Rates Have Vanished — What Remortgagers and Buyers Should Do Now

Nationwide confirmed rate increases of up to 0.35 percentage points across its fixed-rate mortgage range, effective 17 March 2026. The headline move: its two-year fixed rate at 60% loan-to-value (with a £1,495 fee) jumps from 3.97% to 4.32%. Its £995-fee equivalent goes from 4.02% to 4.37%. Higher LTV borrowers face steeper pricing still — the 90% LTV fee-free two-year fix rises from 4.68% to 4.98%, close to the psychologically painful 5% threshold.

NatWest had already withdrawn its remaining sub-4% products. Together, these moves mean the two largest building society and high-street lender no longer offer any fixed-rate mortgage beginning with a three. Only a scattering of specialist and smaller lenders still have sub-4% deals, and brokers report these are being pulled or repriced daily.

This matters because sub-4% was the benchmark many buyers and remortgagers were waiting for. See <a href="/posts/mortgage-guide-remortgaging-uk-2026-when-to-switch-how-to-compare-deals-and-what-it-costs">our complete remortgaging guide</a> for more details. Mortgage brokers had been advising clients that rates would gradually fall as the Bank of England continued cutting base rate. That advice, which seemed reasonable three months ago, now looks dangerously optimistic.

Sources: Nationwide, This is Money (16 March 2026), Mortgage Solutions (March 2026).

This is the question that confuses most borrowers. The Bank of England cut base rate to 3.75% in December 2025, down from 4.00% in August. So why are fixed mortgage rates going up?

The answer lies in swap rates — the wholesale interest rates at which banks lend to each other over fixed periods. Lenders price their fixed-rate mortgages off these swaps, not directly off base rate. And swap rates have been climbing sharply.

The primary driver is geopolitical. The escalating US-Iran conflict has pushed oil and gas prices higher, feeding directly into inflation expectations. If energy costs stay elevated, the Bank of England will be forced to hold rates higher for longer or even pause its cutting cycle altogether. Markets have already priced this in: two-year and five-year swap rates have risen meaningfully in recent weeks, and lenders are passing those costs straight through to borrowers.

Long-term gilt yields tell a similar story. After falling from 4.69% in September 2025 to 4.43% in February 2026, they have ticked back up amid the geopolitical uncertainty. Gilts and swaps tend to move together, and both are signalling that the market expects UK interest rates to stay elevated.

The uncomfortable implication: even if the Bank of England does cut base rate again later in 2026, fixed mortgage rates may not follow. The disconnect between base rate and mortgage pricing could persist for months, perhaps longer. Anyone banking on a mechanical link between Bank of England cuts and cheaper mortgages is making a bet that the market has already moved against.

Let us put concrete numbers on the risk of delay. Consider a borrower remortgaging a £200,000 loan over 25 years.

At 3.97% (the rate available until 16 March), monthly repayments would be approximately £1,052. At 4.32% (the new Nationwide rate from 17 March), they rise to roughly £1,090 — an extra £38 per month, or £456 per year. Over a two-year fix, that is £912 of additional cost. Combined with stamp duty on purchase, the total cost of buying has risen sharply.

But what if rates climb further? If two-year fixes reach 4.75% — entirely plausible given current swap rate trends — monthly payments on the same loan jump to around £1,137, costing £85 more per month than the rate that just vanished. Over two years, the total additional cost reaches £2,040.

Now compare that with the best-case scenario for those who wait. Even if the Bank of England cuts base rate to 3.50% by year-end and swap rates follow, mortgage rates are unlikely to fall below 4.00% again before late 2026 at the earliest. During those months of waiting, borrowers on their lender's standard variable rate — typically 5.5% to 7.0% — would be paying far more than any available fix.

The guardian's calculation is straightforward: the certain cost of a 4.3% fix today is lower than the probable cost of waiting for a rate that may never materialise. Protecting yourself means locking in what is available now, not gambling on a future that geopolitical events could push further away.

Use our mortgage calculator to run the numbers on your own loan size and term.

If your fixed deal ends in the next six months, act now. Most lenders allow you to lock in a rate up to six months before your current deal expires, with no obligation to proceed if something better appears. This is your insurance policy — it costs nothing and protects you against further increases.

If you are on a standard variable rate, you are almost certainly overpaying. SVRs at the major lenders sit between 5.5% and 7.0%. Even a 4.32% fix represents a substantial saving. Every month you delay is money lost.

If you are a first-time buyer, the rate environment makes affordability calculations tighter, but it does not mean you should abandon your plans. Government schemes can help bridge the gap — see our guide to every first-time buyer scheme still available in 2026.

Speak to a whole-of-market broker. The sub-4% deals that remain are mostly with smaller lenders and specialist providers that do not appear on comparison sites. A broker can access these before they disappear. Do not rely solely on your existing lender's retention offer.

Consider the fixed vs variable decision carefully. With base rate at 3.75% and tracker mortgages priced at slim margins above it, some borrowers may find a tracker temporarily cheaper than a fix. But trackers offer zero protection if rates rise — and the guardian's instinct should be to prioritise certainty over a small short-term saving. Read our detailed comparison of fixed vs variable rates before deciding.

Overpay if your deal allows it. Whether you fix now or are already locked in, overpaying reduces your outstanding balance and your loan-to-value ratio. Lower LTV means better rates when you next remortgage. Most lenders allow overpayments of up to 10% per year without early repayment charges.

The guardian in every borrower should be asking this question. Several scenarios could push mortgage rates materially higher.

Escalation of the Iran conflict. If the situation deteriorates further, oil prices could spike above $100 per barrel, pushing UK petrol prices toward £1.70-£1.80 per litre and feeding through to broader inflation. The Bank of England would have little choice but to pause rate cuts or even reverse course. Swap rates would surge, and mortgage pricing would follow within days.

Sticky inflation. UK CPI is currently around target, but energy-driven inflation is notoriously persistent. If inflation expectations become unanchored, the gilt market will demand higher yields, and mortgage lenders will reprice accordingly.

A gilt market sell-off. We saw this during the mini-budget crisis of September 2022, when gilt yields spiked and mortgage products were pulled overnight. While that scenario was extreme, the UK gilt market remains sensitive to fiscal policy surprises and global risk events. The current elevated volatility means a sudden repricing is not far-fetched.

Further lender withdrawals. When rates move quickly, lenders protect their margins by pulling products entirely rather than repricing. This reduces choice and pushes borrowers toward whatever remains — often at worse terms.

The protective move is clear: secure a rate now while options still exist. You can always renegotiate later if rates improve, but you cannot go back and lock in a rate that has already been withdrawn.

Source: Bank of England base rate history.