The Intermediary Mortgage Lenders Association (IMLA) has published a report and five-minute guide to help mortgage brokers understand swap rates and their impact on fixed interest rates.
Housing boom Affordable accommodation Decide on mortgage loans, investments, real estate and ownership concept – house model and stack of gold coins 3d render
IMLA said the new publications are intended to help bridge any knowledge gaps on mortgage pricing.
The importance of swap rates was emphasized in early 2026 after the outbreak of conflict between the US, Israel and Iran. Between early March and early May, the two-year swap rate rose from approximately 3.6% to more than 4.5%.
During the same period, the average two-year fixed mortgage rate rose from 3.97% to 5.14%. That meant an increase of more than 1.1 percentage points. The tracker mortgage rate, which directly follows the bank rate, remained unchanged.
The main report, How lenders finance fixed-rate mortgages: swap rates explainedis written by Rob Thomas, principal researcher at IMLA and former Bank of England economist.
The report explains how lenders finance fixed-rate mortgages. It outlines the role of deposits and other variable rate funding sources. It also examines how the swap market allows lenders to offer fixed-rate products and why changes in the swap rate can lead to rapid repricing.
A second publication, Swap rates explained: five minutes of readinggives a shorter summary. It is intended for advisors who need a simple explanation during customer conversations.
Kate Davies, executive director of IMLA, said: “Swap rates have become part of everyday language in the mortgage market, but remain poorly understood outside a relatively small group of specialists.
“When mortgage rates rise or products are discontinued, borrowers want answers. Advisors need to be able to explain what is happening.
“The key point is that the pricing of fixed rate mortgages follows the swap rate, not Bank interest. Rob’s report explains how fixed-rate mortgages are financed and why swap rates play such an important role.
“We know that not everyone has time to read a detailed technical article. That’s why we’ve also created a five-minute guide. Together, the two publications give advisors the information they need to explain these issues with confidence.”
Both publications can be downloaded for free from the IMLA website.