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Mon, 05 Oct 2026

Mon, 05 Oct 2026 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.

* The average interest rate on a new five-year fixed mortgage deal has reached 6%, its highest level in three years.
* Over 1,500 mortgage deals priced below 5% have vanished since September, leaving borrowers with limited options.
* Lenders face higher costs due to rising government borrowing costs and global economic uncertainty, leading to repeated rate increases.
* The average rate on two-year fixed mortgages has also increased, reaching its highest level since December 2023.
* Experts warn that borrowers who are coming to the end of a fixed deal should seek advice and compare deals carefully.
* Rate rises are "inevitable" due to lenders' increasing wholesale funding costs, which have climbed as a result of rising gilt yields.
* Millions of mortgage-holders will see their monthly payments increase by the end of 2028, according to Bank of England forecasts.