For borrowers, the interest rate on a fixed mortgage does not change until it expires, usually after two or five years, and a new one is chosen to replace it. The vast majority of homeowners and buyers have this kind of mortgage.
Since the Iran war began, global economic uncertainty has pushed up the cost of deals.
Someone on a typical two-year deal, and borrowing £250,000 is likely to pay £120 more a month in mortgage repayments than they would have had they secured the deal at the start of March when the US-Israeli strikes began.
More recently, UK government borrowing costs have been rising, which has a knock-on impact on mortgage rates.
That pressure has been maintained in the latest sale of debt by the UK on Tuesday. A 30-year bond issued by the UK was sold with a yield – or interest rate – of 5.82%, the highest since 1998.
The governor of the Bank of England, Andrew Bailey, is expected to be asked about this bond market upheaval when he is questioned by the Treasury Committee of MPs later on Tuesday.
The situation has resulted in several major lenders raising their rates in the last few days.
“The difficult bit is knowing whether this is the end or just the first round of increases,” said David Hollingworth, from broker L&C.