Just as mortgage rates were moving lower, fresh fighting broke out between the United States and Iran, prompting some of the big lenders to reverse course.

According to Moneyfacts, average fixed-rate mortgage deals recorded their biggest monthly reductions since October 2024 during June.

The average two-year and five-year fixed rates both fell to 5.52%, with the most competitive deals for borrowers with larger deposits under 4.5%. The number of available mortgage products also rose to 7,177, its highest level this year.

At the time those figures were released, the outlook had been improving. A deal between the United States and Iran had helped lower energy prices, easing inflation concerns and raising expectations that the Bank of England could continue cutting interest rates. That, in turn, encouraged lenders to compete more aggressively for new business.

Renewed hostilities in the Gulf have now prompted a number of lenders, including Nationwide and Virgin Money, to announce increases on selected mortgage products, with some fixed-rate deals rising by as much as 0.35 percentage points.

Until there is a lasting peace agreement between Iran and the United States, the mortgage market is likely to remain volatile. The movements may be relatively small, but they can still prove costly for borrowers and have a knock-on effect on confidence in the housing market.

Two-year fixed rates: 4.42% from Nationwide BS. Product fee £999. 60% LTV.
4.47% from first direct. Product fee £490. 60% LTV.

Five-year fixed rates: 4.49% from Nationwide BS. Product fee £999. 60% LTV.
4.54% from first direct. Product fee £490. 60% LTV.

Discounted variable: 4.24% From Bath BS for 2 years. Product fee £999. 80% LTV.br> 4.29% From Newbury BS For 3 years. Product fee £850. 75% LTV.

BUY-TO-LET (BTL)

Best two-year fixed rate: 4.41% from NatWest. Arrangement fee £995. 65% LTV.

Five-year fixed rate: 4.45% from NatWest. Arrangement fee £995. 65% LTV.

Best Discounted variable: 4.65% For 5 years. From Newbury BS. Arrangement £950. 75% LTV.

The information we provide is our personal opinion and should not be relied upon for financial advice. Should you need financial advice or guidance, please contact an appropriate professional.