Mortgage costs have risen sharply in the UK, with the average five-year fixed-rate deal reaching 6% as higher market borrowing costs put renewed pressure on households and prospective homebuyers.
Data from Moneyfacts shows that the average five-year residential fixed mortgage rate reached 6.00% on October 5, its highest level since September 2023. The average two-year fixed rate has also climbed close to the same level, reaching 5.98%.
The increase comes despite no change in the Bank of England’s base rate since December 2025. Instead, movements in financial markets and higher swap rates, which influence the pricing of fixed-rate mortgages, have pushed lenders to increase the cost of new deals.
Sub-5% mortgage deals almost disappear
Borrowers now have far fewer options if they are looking for a fixed mortgage below 5%.
Moneyfacts said the number of sub-5% fixed-rate deals available to borrowers in Great Britain has fallen to just nine, compared with 1,494 at the beginning of September.
That represents a fall of more than 99% in the number of available deals in less than a month. Moneyfacts noted that the figures exclude products available exclusively to Northern Ireland borrowers.
The sharp reduction means buyers who had been expecting mortgage rates to continue falling are facing a very different market.
Higher repayments could affect homebuyers
The increase in rates is particularly significant for people purchasing a home or preparing to refinance after an existing fixed-rate mortgage expires.
Figures from the HomeOwners Alliance indicate that a £250,000 mortgage fixed at 6% for five years would require monthly repayments that are £158 higher than the same loan at the 4.94% average rate recorded by Moneyfacts at the beginning of February.
For households already working with tight budgets, even a relatively modest increase in monthly repayments can affect the amount they are able to borrow.
Buyers may have to reduce their budgets
The higher cost of borrowing is also beginning to weigh on activity in the housing market.
Nationwide reported last week that annual UK house price growth had slowed to 0.8% in September, down from 1.6% in August. House prices also fell by 0.2% month-on-month after seasonal adjustment.
Higher mortgage costs could add another obstacle for buyers who are already struggling with affordability.
Estate agents have reported that some prospective purchasers may need to lower their budgets as repayments become more expensive, while homeowners approaching the end of fixed-rate agreements could reconsider whether they can afford to move.
Why fixed mortgage rates are rising
The latest increase is being driven largely by financial market conditions rather than a recent Bank of England rate decision.
Swap rates, which lenders use when pricing many fixed-rate mortgage products, have moved higher as financial markets have become more concerned about inflation and future interest rates.
Major lenders also increased selected mortgage rates repeatedly during September. Moneyfacts reported that Barclays raised some fixed rates on four occasions, while HSBC, Lloyds Bank, Nationwide, NatWest, Santander and TSB each made three rounds of increases.
Mortgage costs add pressure to the housing market
The latest figures create another challenge for a UK housing market that has already experienced weaker price growth.
For first-time buyers, higher mortgage rates can reduce purchasing power even when house prices are not rising rapidly. Existing homeowners facing the end of a fixed-rate period may also find that their next deal is considerably more expensive than the one they previously secured.
The disappearance of most sub-5% fixed-rate products therefore represents a significant change in the mortgage market.
For households planning to buy or refinance, the combination of higher borrowing costs and limited access to cheaper fixed deals could keep affordability under pressure in the months ahead.
