DONALD Trump’s ceasefire with Iran is leaving mortgage advisers and their clients “breathing a sigh of relief”.
A 14-day ceasefire has been agreed between the US and Iran. As a result, oil prices have retreated and the markets are reacting positively.
The price of Brent crude oil fell by about 13% to nearly $95 (£71) a barrel and London’s FTSE 100 share index jumped by over 2.5% in opening trade.
Oil prices are still higher than before the conflict started on 28 February, when it was around $70 a barrel.
On Tuesday evening, US President Trump wrote on Truth Social: “I agree to suspend the bombing and attack of Iran for a period of two weeks… subject to the Islamic Republic of Iran agreeing to the complete, immediate, and safe opening of the Strait of Hormuz.”
Many mortgage deals have risen by over 1% across the board since the start of the war in Iran, ending the steady move towards sub-4% deals.
Brokers have welcomed the ceasefire – but warned that it is uncertain whether the two-week deal will hold and it is not clear how this will feed into mortgage costs.
Borrowers should be breathing a sigh of relief
Babek Ismayil, CEO at homebuying platform OneDome, said there is finally some hope for borrowers.
He added: “It’s far too early to declare that the rate rises we have seen over the past five weeks or so will go into reverse. But, for now at least, we may not see further rate rises as lenders and markets assess and monitor events in the Middle East.
“It’s hard to know what Trump will do next and that uncertainty alone will prevent a sudden repricing downward of rates in the short term. But the ceasefire and reopening of the Strait of Hormuz offers some hope for now.”
Riz Malik, Independent Financial Adviser at Southend-on-Sea-based R3 Wealth, said the positive news is fragile.
He added: “Oil has already retreated quite sharply and traders have improved their outlook for interest rates in the future. We should see the market react positively, potentially creating a window of opportunity for mortgage pricing.
“Unfortunately, it is only a window as the tables could turn at any time. We also have tankers that are a month away from where they should be. However, the overnight ceasefire is the most positive news the mortgage market has had since the beginning of this war.”
It’s a temporary parking permit
Darryl Dhoffer, Founder at Bedford-based The Mortgage Geezer, warned that everyone should keep their expectations low.
He said: “A whole 14 days of not poking the bear. The US and Iran have signed a ceasefire shorter than most gym memberships, and the markets are swooning like they’ve just witnessed world peace. Oil futures are retreating, and the ‘experts’ are dusting off their party hats, expecting a rally that would make a bull blush.
“But let’s get real: if you’re waiting for wholesale mortgage prices to plummet, don’t hold your breath. This isn’t a ‘runway for lift-off’, it’s a temporary parking permit. Lenders aren’t about to slash rates based on a truce that expires before your next haircut.
“Two weeks of quiet in the Middle East is a blink in the eye of the bond market. Keep your expectations in the basement – right next to the actual chance of this lasting.”
Charles Hart, Business Principal at Milton Keynes-based LionHart Mortgages & Protection, said everyone is breathing a sigh of relief.
He added: “Mortgage advisers and their clients should be breathing a sigh of relief as this is expected to make the chance of further short notice increases significantly less likely.
“That being said, it is unlikely we will see immediate reductions or market shifts with such a short term agreement as we wait to see the inflation data later this month. The situation remains both fragile and unpredictable in Iran but the chance to breathe and take stock will be well received.”
The damage to Western economies and inflation is already done
Samuel Mather-Holgate, Managing Director & IFA at Swindon-based Mather and Murray Financial, said the damage of the war is already baked-in.
He added: “Even if this ceasefire is reality, the damage to Western economies and inflation is already done. Gilt rates may move down today, but not enough to stave off mortgage rate rises for the next six months.
“If you haven’t already put your seatbelt on, strap in for a turbulent three years as no one knows that Trump is going to do during his presidency.”
Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, said it was a welcome pause.
He added: “There is plenty to unravel before we see any wholesale cuts in mortgage rates. This will more likely provide a welcome pause to the daily rate increases suffered by borrowers over the past month or so, as the markets look to recalibrate their expectations for 2026.
“I would expect lenders to prioritise purchase deals in the short term, given we are in the middle of what is traditionally the peak home-buying season. For those remortgage borrowers looking for significant rate cuts and a better deal, you may need to hold on for a little longer.”
Photo by Joshua Earle on Unsplash.
