Buy-to-let landlords face a setback in their refinancing plans as lenders pause or reconsider rate reductions following a spike in swap rates driven by escalating conflict in the Middle East. Two-year swap rates – which heavily influence fixed mortgage pricing – rose 26 basis points from 3.33 percent on Friday to 3.59 percent by Wednesday morning, while five-year swaps climbed 21 basis points from 3.50 percent to 3.71 percent.
Adam French, Head of Consumer Finance at Moneyfacts, said the market shift was having an immediate effect on lending decisions. “Some lenders have already paused or reconsidered planned rate reductions,” he said. “Because fixed mortgage pricing is closely linked to swap rates, this sudden market movement risks halting the recent momentum towards lower mortgage rates just as borrower confidence had begun to build.”
Rate rise now possible as March cut hopes fade
The Institute for Fiscal Studies (IFS) has warned that a rate increase cannot be ruled out. Ben Zaranko, Associate Director at the IFS, said financial markets had stopped pricing in a March rate cut, adding: “In the short term what we might see is rather than rates go up, it might just mean rate cuts we might otherwise have experienced don’t happen.”
City traders are now pricing only a 27 percent chance of a Bank of England rate cut this month, compared with 86 percent on Friday – a dramatic reversal in sentiment within days.
The National Institute of Economic and Social Research (NIESR) went further, projecting that inflation would rise by 0.7 percent this year with interest rates climbing 0.8 percent, followed by a further 0.4 percent increase in 2027. Rising oil and gas prices linked to the conflict are driving inflation concerns, forcing a reassessment of monetary policy expectations.
What landlords remortgaging should watch
This follows Landlord Knowledge’s February report on the £49.7 billion refinancing wave facing buy-to-let landlords, with many fixed deals maturing this year. The latest swap rate movements suggest that anticipated rate relief may now be delayed or reversed entirely.
French added that global geopolitical events had a direct impact on borrowing costs. “Swap rates ultimately shape the deals available to borrowers – all while the world watches deeply troubling events unfold,” he said.
What this means for landlords
- If you’re remortgaging soon: Lock in current rates quickly before further increases – deals available today may be withdrawn or repriced within days
- Watch for: The Bank of England decision on 20 March – a hold or surprise rise would signal prolonged higher rates
- Bottom line: The spring rate-cutting cycle landlords were banking on may now be delayed significantly or reversed
Editor’s view
This shows how BTL mortgage costs are shaped by forces far beyond Threadneedle Street. Landlords who delayed refinancing in hope of better spring rates may now face a difficult choice: lock in before things worsen, or gamble on geopolitical stabilisation that may not come.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 5 March 2026
Sources: Moneyfacts, Institute for Fiscal Studies, National Institute of Economic and Social Research
Related reading: Buy-to-let refinancing wave looms as £49.7bn in mortgages mature
