Rising mortgage rates are reshaping borrower choices, with many turning to two-year fixed and convertible deals in response to the recent rise in geopolitical tensions in Iran, according to the data. Moneyfactscompare.co.uk.
Analysis of mortgage searches for the 30 days to April 2, 2026, compared to the previous month, shows a clear change in borrower behavior.
Demand for two-year fixed deals rose 13%, reflecting a preference for flexibility amid uncertainty, while interest in five-year fixed deals fell 9%, leading to a sharp decline among homemovers and mortgage borrowers.
Variable rate mortgages also saw growth, particularly among homemovers, who increased searches by 47%, although these still represent a small portion of the market.
The data highlights how rising rates are impacting decisions: Two-year fixes have increased by 99 basis points and five-year fixes by 81 basis points since the beginning of February, while variable rates have increased by just 28 basis points. Borrowers are increasingly looking for shorter-term commitments as they face higher interest rates and market uncertainty.
Adam French, head of consumer finance at Moneyfactscompare.co.uk, said: “The speed and scale of rate rises over the past few weeks have rapidly changed borrower behaviour. With five-year fixes rising by more than 80 basis points, many are turning to two-year deals in the hope that rate rises due to the conflict in Iran will prove short-lived. “Demand for a five-year fix is typically strongest among homemovers, who value certainty in their monthly payments, especially as they have typically taken out larger loans. Instead, there has been a dramatic shift toward shorter-term options. Mortgage borrowers who are already facing significant payment shocks also appear reluctant to lock in higher rates for extended periods. “Some borrowers may also be banking on rates falling earlier than the market expects. Particularly among homemovers, there has been a notable, if still relatively small, shift toward variable rate mortgages. While these products remain a minority choice, the boom suggests some borrowers are willing to take on more risk, betting that rates may fall back in the near term.” Changes in Average Mortgage Rates
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