Since the war began in late February, the average two-year fixed rate in the UK has jumped 0.91 percentage points to 5.75%, according to Moneyfacts

UK homeowners are bearing a heavier mortgage burden than those in continental Europe or the U.S. as the Middle East war continues to push energy prices higher and fuel inflation fears.

Since the war began in late February, the average two-year fixed rate in the UK has jumped 0.91 percentage points to 5.75%, according to Moneyfacts. On a £200,000 repayment mortgage over 25 years, that equates to an additional £107 per month, taking monthly repayments to £1,258.

The increases elsewhere have been more modest. The average 30-year fixed rate in the US — the most common product in that market — rose just 0.38 percentage points to 6.36%. In Germany, mortgage rates rose by approximately 0.3 percentage points, as reported by the Financial Times.

Analysts attribute the UK’s sharper rate movement to its greater dependence on imported oil and gas, which makes it more susceptible to inflation driven by energy price rises.

Ten-year gilt yields have increased 0.6 percentage points to 5.18% since the start of the year, a more pronounced rise than equivalent government bond yields in the US (up 0.42 percentage points), Germany (0.31 percentage points) and France (0.26 percentage points).

Mortgage rates and bond yields are responding to the same underlying driver — a sharp rise in inflation expectations linked to higher energy prices from the Middle East war, said Richard Carter, wealth manager at Quilter Cheviot.

The UK has been hit harder than some of its peers because it is particularly exposed to imported inflation, so rises in oil and gas prices feed through more quickly, said Carter. That has pushed gilt yields up more sharply, with investors also sensitive to factors including political uncertainty and the prospect of higher government borrowing and the watering down of fiscal rules in the event of a change in the prime minister.