March 2026 - What’s New in Mortgages This Month?
- Apr 6
- 5 min read
March felt like two different mortgage markets in one month.
The first half of the month looked broadly steady, with spring listing activity picking up and buyer demand holding up reasonably well.
By the second half, the tone had changed. Rate expectations shifted, lenders started repricing more quickly, and product choice tightened as markets reacted to rising geopolitical risk and concerns about inflation.
Here’s what stands out this month.
1. The Bank of England held Bank Rate at 3.75%, but the message was more cautious
At its meeting, the Monetary Policy Committee voted unanimously to keep Bank Rate at 3.75%.
More importantly for borrowers, the Bank said the conflict in the Middle East had already caused a significant rise in global energy and commodity prices, and that this was likely to push CPI inflation higher in the near term.
That matters because fixed mortgage pricing is not driven only by where Bank Rate is today. It is also shaped by where markets think inflation and interest rates may go next.
March’s message from the Bank was not that rates were about to surge immediately, but that the path lower no longer looked as straightforward as it had earlier in the year.
For borrowers, that meant the market became more sensitive, especially on fixed rates.
2. Spring Statement did not bring a big mortgage giveaway, but it did reinforce the wider economic backdrop
The Chancellor’s Spring Forecast was more about the wider economy than direct mortgage intervention. The government said the OBR expected inflation to return to target in the second half of the year, earlier than previously forecast, and repeated its position that earlier interest rate cuts had already improved costs for typical new fixed-rate borrowers.
In practical mortgage terms, the bigger point was this, March did not deliver a major new housing or mortgage policy change that would suddenly improve affordability.
Instead, the market continued to focus on inflation, swap rates, lender funding costs and borrower resilience.
That is one reason March quickly became a month where pricing moved faster than policy. This is an inference based on the Spring Forecast’s content and the mortgage market reaction later in the month.
3. FCA data showed risk appetite is still there, but higher-LTV and higher-LTI lending is becoming more prominent
The FCA’s March release of Q4 2025 mortgage lending statistics showed several important trends that are highly relevant now.
The share of gross mortgage advances above 90% loan-to-value rose to 8.3%, the highest since 2008 Q2. The proportion of lending to borrowers with a high loan-to-income ratio rose to 46.5%, the highest since 2022 Q4.
At the same time, the stock of mortgage balances in arrears fell to £20.4 billion, the lowest since 2023 Q3.
That combination tells a useful story. Lenders are still lending, and there is still appetite for higher-leverage borrowing, but affordability and case quality matter more than ever. It also helps explain why some applications look perfectly fine on paper but still face more detailed scrutiny, especially at 95% LTV, with gifted deposits, variable income, or tight affordability.
4. The first half of March looked stable, but cracks were already showing underneath
Rightmove’s 16 March update suggested the housing market itself had not panicked.
Newly listed asking prices rose by 0.8% in March, the number of homes for sale was at its highest level for over a decade, and buyer demand had not fallen sharply despite the new global uncertainty. Rightmove also said the average two-year fixed mortgage rate had risen to 4.51% from 4.24% the week before.
That is a useful reminder that the property market and the mortgage market do not always react at the same speed. Buyers were still active, sellers were still coming to market, but mortgage pricing had already started to move.
For first-time buyers, there was a mixed picture. Rightmove reported that typical first-home asking prices were down 0.4% year on year, which may create some opportunity for deposit-ready borrowers, but only if they can still pass affordability at the new rate levels.
5. Late March brought the sharpest mortgage repricing story of the month
By 25 March, the pace of repricing had become much clearer.
Moneyfacts reported that the average two-year fixed rate had jumped to 5.56%, while the average five-year fixed rate stood at 5.54%, meaning the two-year average had moved above the five-year average again.
It also said that more than 1,500 mortgage deals had been withdrawn since 9 March, leaving borrowers with fewer than 6,000 options.
That kind of move is not just a pricing story, it is a workflow story. When lenders reprice quickly, product withdrawals can happen faster than many buyers expect. Cases that looked affordable a week earlier may suddenly need restructuring, a different product term, or a lower loan amount. This is especially relevant where borrowers are stretching at the edge of affordability, or relying on 95% borrowing, where Moneyfacts said the average two-year fixed at 95% LTV had moved above 6%.
March therefore became a month where timing mattered again.
6. The government responded by re-emphasising support for worried borrowers
On 26 March, the government published the Mortgage Charter 2026 after the Chancellor met lenders representing 75% of the market. The message was that the mortgage market remained open and competitive, and that borrowers worried about payments should contact their lender early.
The Charter also states that seeking support and discussing options with your lender will not affect your credit score.
This does not solve the pricing issue, but it does matter for borrowers coming to the end of a fixed rate or feeling exposed by March’s sudden volatility.
Too many people still delay that conversation because they assume asking for help automatically damages their profile. The current Charter wording is clear that early engagement is encouraged.
7. End-of-month Bank data showed buyer activity had not fallen away before the late-March volatility
The Bank of England’s Money and Credit release on 30 March showed that net mortgage approvals for house purchase rose to 62,600 in February, up from 60,200 in January.
Remortgage approvals also increased to 41,200, from 38,500. Net borrowing of mortgage debt by individuals rose to £4.8 billion in February.
That data is backward-looking, but it still matters. It shows the market entered March with a reasonable level of activity. In other words, this was not a weak market that then became weaker. It was a market with some momentum that then ran into a sharper-than-expected repricing event late in the month.
What this means for borrowers
If February was about selectivity, March was about stability turning into volatility.
The key themes now are:
Rates can still move quickly, even when Bank Rate itself has not changed.
Product availability matters as much as headline rate, because withdrawals can happen fast in unsettled markets.
Higher-LTV borrowing remains available, but it is more exposed to sudden pricing pressure and tighter underwriting.
Support remains available for borrowers worried about payment shock, and early contact with your lender is still the right move.
For buyers, remortgagers and investors alike, March was a reminder that mortgage markets often change direction before the wider property market does.
Well-prepared cases are still getting done. But in this environment, speed, structure and realistic expectations matter more than they did a few weeks ago.