British mortgage rates have risen above 5% for the first time since last August, with lenders citing ongoing geopolitical tensions related to the conflict in Iran as a primary factor behind the increases.

The typical two-year fixed-rate mortgage has crossed the 5% threshold, marking the most significant upheaval in the mortgage market since the mini-Budget crisis. Multiple major lenders, including TSB, have announced increases to their fixed mortgage rates in response to the Middle East situation.

Mortgage brokers are warning that rates below 4% could disappear entirely within the coming week, as three additional lenders have implemented rate hikes. The increases are expected to affect approximately one million British homeowners who need to remortgage this year.

The rate rises come as the Federal Reserve prepares to address interest rates at its upcoming March meeting, though analysts note that potential Fed rate cuts may not necessarily translate to lower mortgage costs for borrowers. The current situation represents the biggest disruption to mortgage markets since the government's September mini-Budget caused widespread financial turbulence.

Lenders continue to reprice their mortgage products higher as they assess the ongoing impact of Middle East conflicts on global financial markets and economic stability.