Abstract An analysis of fluid flow and thermal transfer has been encountered numerically for natural convection of Ag–MgO (50%–50%) water hybrid nanoliquid in a vertical enclosure permeated by a uniform magnetic field and different sets of heat source-sink pairs. The control equations (Navier-Stokes equations) constituting streamfunction (ψ) – vorticity (ζ) formulations with energy equation are solved by adopting a higher order compact finite difference scheme. Furthermore, the consequence of emerging parameters affecting fluid flows and heat transfer, namely, Hartmann number (0 ≤ Ha ≤ 60), hybrid nanoparticles volume fraction (0 ≤ φhnp ≤ 0.02), Rayleigh number (103 ≤ Ra ≤ 106), different cases (Case-I-III), aspect ratios (AR = 0.5, 1, 2, 4) and internal heat generation or absorption (−2 ≤ Q ≤ 2) are analyzed generously. Experimentally established correlations for thermal conductivity and dynamic viscosity have been used throughout the study. Obtained results ascertain that the arrangement of heat sources and heat sinks put major impact on fluid flow and heat transfer. The presence of magnetic field causes a reduction in flow strength which leads to decrease in thermal transmission and the maximum value of stream function. Moreover, Ag–MgO hybrid nanoparticles play indispensable role to levitate the thermal transmission compared to other parameters.