Average five‑year fixed mortgage rate reaches 6% for first time in three years
Bankers in the United Kingdom say the average rate for a new five‑year fixed‑rate mortgage has risen to 6%, driven by higher funding costs and bond‑market turmoil. The increase marks the highest level since 2021 and is prompting lenders to reassess pricing.
First reported 4 hours ago · latest update 1 hour ago
The average interest rate on a new five-year fixed mortgage deal has hit 6% for the first time in three years, figures show.
The cost of home loans has been rising in recent weeks, as lenders face higher costs amid international concern over rising prices, interest rates, and government borrowing costs.
It means home buyers and anyone renewing a fixed deal have seen about 1,500 mortgage deals priced below 5% vanish since the start of September, according to the financial information service Moneyfacts.
It described the situation as "brutal" for borrowers, with the average rate on five-year deals now at 6%, and at 5.98% on two-year fixed mortgages.
For borrowers, the interest rate on a fixed mortgage does not change until it expires, usually after two or five years, and a new one is chosen to replace it. The vast majority of homeowners and buyers have this kind of mortgage.
Since the Iran war began, global economic uncertainty has been pushing up the cost of deals.
Moneyfacts said that the biggest High Street lenders had made repeated fixed rate increases during September. Barclays increased selected fixed rates on four occasions, while HSBC, Lloyds Bank, Nationwide, NatWest, Santander and TSB each made three rounds of increases.
It meant that the average rate on a new five-year deal was at its highest since September 2023. On two-year deals, the average rate is at its highest since December 2023.
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Average five-year mortgage rate hits 6% for first time in three years
The cost of a new fixed-rate mortgage has been rising in recent weeks as lenders face higher costs.
4 hours agoAverage five-year fixed mortgage rate hits 6% for first time in three years
Banks and building societies raise prices as turmoil in bond markets increases expectations of base rate riseThe average cost of a five-year fixed-rate mortgage has hit the 6% barrier for the first time in three years, as jitters in the money markets make the loans more expensive for lenders to offer.Figures from financial information provider Moneyfacts show the average is now 6.00%, its highest point since September 2023, while the average two-year fixed rate is not far behind at 5.98%, its highest since December of the same year. Continue reading...
1 hour ago · Hilary Osborne