New mortgage borrowers in the UK are facing significantly higher costs, with typical deals now costing £788 more annually than before the current Middle East conflict began, according to market analysis.

Lenders have responded to the ongoing war by increasing interest rates on new mortgage products and withdrawing certain deals from the market entirely. The changes reflect broader uncertainty in financial markets as the conflict continues to affect global economic conditions.

The mortgage market adjustments come as financial institutions reassess risk amid geopolitical instability. Banks and building societies have become more cautious in their lending practices, leading to reduced product availability for prospective homebuyers.

The impact extends beyond individual borrowers, with the housing market facing potential cooling as higher borrowing costs may reduce demand. First-time buyers and those seeking to remortgage existing properties are particularly affected by the rate increases.

Market analysts indicate that the lending sector's response reflects standard practice during periods of geopolitical uncertainty, when financial institutions typically tighten lending criteria and adjust pricing to account for increased risk factors.