The average two-year yield rose again this morning to 5.89% – an increase of 5 basis points since yesterday and 106 basis points since the outbreak of the war.
Before the airstrikes on Iran at the end of February, this rate was 4.83%, according to Moneyfacts data.
The mortgage rate shock has been the sharpest since the aftermath of the Liz Truss mini-Budget in September 2022.
However, the increase in costs this month has not been as rapid as then, when interest rates rose by 181 basis points in one week.
The average five-year interest rate now stands at 5.78%, up from 5.75% yesterday and 4.95% a month ago.
The availability of mortgages has fallen dramatically: there are now 1,283 fewer products available than earlier in March.
Back then, borrowers could choose from 7,484 deals, while now there are 6,201 – a reduction of 17%.
Borrowers coming to the end of the five-year fixed rate period will likely be the hardest hit, as average rates have risen by more than 307 basis points since they entered into their previous agreement.
This means that repayments on a £250,000 mortgage would be over £430 higher per month and/or an extra £5,130 per year.
Adam French, head of consumer finance at Moneyfacts, said: “The conflict in Iran has rapidly raised interest rate expectations and sent borrowing costs soaring, representing the biggest shock to the UK mortgage market since the aftermath of the 2022 mini-Budget.
“While it doesn’t match the extreme jumps we saw at the time, it is still a sharp and sudden shift that has significantly worsened affordability in a very short time.
“For many borrowers, the costs can be significant.
“Someone taking out a standard two-year repair will find it costs an average of £150 more per month compared to just a few weeks ago.
“However, the real payment shock will be felt by those taking out older five-year deals, where interest rates have more than doubled, increasing repayments by many hundreds of pounds per month.
“The combination of rising interest rates, reduced choice and increased volatility means borrowers and brokers are operating in a market where timing is critical and the time to close competitive deals can be very short.”