Typical mortgage costs £788 a year more than before Iran war

A typical mortgage taken out now is £788 a year more expensive than before the Iran war began, new data has revealed.

The increase relates to homeowners and buyers with a 25-year mortgage of £250,000, and an average two-year fixed rate of 5.28%.

The figures, compiled by financial information service Moneyfacts, show how lenders have hiked rates and withdrawn deals since the US-Israel strikes on Iran began at the end of February.

The biggest lenders have pulled the best sub-4% mortgage deals, but brokers say borrowers can still navigate the huge uncertainty and should plan well ahead before any current deal expires.

For borrowers, the interest rate on a fixed mortgage does not change until the deal expires, usually after two or five years, and a new one is chosen to replace it.

Variable deals, such as tracker rates, usually move in line with changes to the Bank of England's benchmark interest rate. The Bank's rate-setting committee meets later this week.