In simple terms, Trumpflation refers to concerns that Donald Trump’s economic policies, particularly tariffs on imported goods and increased government spending, could push inflation higher again.

At the same time, growing conflict in the Middle East is adding further uncertainty to global markets, particularly around oil and energy prices. And when inflation rises, or markets become nervous, mortgage rates can be affected too.

For homeowners, buyers, and anyone coming to the end of a fixed-rate deal, this matters because even small changes in interest rates can have a noticeable impact on monthly payments.

Why could global events affect UK mortgage rates?

It might seem strange that events in America or the Middle East could influence UK mortgage rates, but global financial markets are closely connected.

When markets become uncertain:

• Oil and energy prices can rise

• Inflation can remain stubbornly high

• Investors become more cautious

• Borrowing costs can increase globally

That can lead lenders to increase mortgage pricing and central banks to delay interest rate cuts.

Recent analysis linked to the Bank of England “Trumpflation” stress scenarios suggests that if inflation remains elevated and oil prices stay high due to ongoing Middle East tensions, mortgage rates could remain higher for longer.

In a worst-case scenario, average mortgage rates could rise towards 6.75%.

What could this mean for homeowners?

Potentially, higher monthly repayments. Some projections suggest borrowers with an average mortgage could end up paying more than £3,000 extra per year if inflation rises sharply and lenders continue repricing mortgages upwards.

That could mean:

• Higher monthly repayments for people remortgaging

• Reduced borrowing power for buyers

• Fewer ultra-low fixed-rate deals returning anytime soon

For homeowners coming off older fixed deals, this could still feel like a significant jump compared to the rates available a few years ago.

But there’s also a chance rates could fall

Interestingly, economic uncertainty can sometimes have the opposite effect.

If global tensions slow economic growth too much, central banks may eventually cut interest rates to support the economy.

So, while markets may remain volatile in the short term, mortgage rates could gradually ease if recession fears begin to outweigh inflation concerns.

The challenge is that nobody knows exactly which direction things will go, and mortgage pricing can change quickly.

What should borrowers do right now?

Rather than trying to perfectly time the market, it’s usually better to review your options early and understand what deals are available before your current rate ends.

Many lenders allow you to secure a rate several months in advance, giving you protection if rates rise while still allowing flexibility if rates improve

How Moat Mortgages can help

In uncertain times, there’s one thing you can be certain of: Moat Mortgages will help guide you through the market and secure the best mortgage deal available for your circumstances.

Whether you’re remortgaging, buying your first home, moving house, or simply exploring your options, our expert advice is completely free.