According to the latest Moneyfacts UK Mortgage Trends Treasury Report, the average two- and five-year fixed mortgage rate has risen month-on-month for the first time in eight months.
The average mortgage interest rate on the total two- and five-year fixed interest rate increased by 0.02% to 4.98% and 5.02% respectively. The last month-on-month interest rate increase was registered in early February 2025.
At the beginning of October 2024, the average five-year fixed interest rate was 5.07%; compared to the beginning of this month, so the rate is 0.05% lower at 5.02%. However, the average two-year fixed interest rate has fallen by 0.42% over the same period, from 5.40% to 4.98%.
Moneyfacts’ average mortgage interest rate rose for the first time since February 2025 to 5.02%. The rate has increased from 5% month-on-month, down from 5.30% in October 2024 and much lower than 6.21% in October 2023.
The mixed moves of lenders led to an increase in the average mortgage term to 22 days, compared to 17 days a month earlier. This is the first time that the average shelf life for six months has exceeded 20 days (21 days – April 2025).
The average variable mortgage rate with a two-year term rose to 4.67%, while the average ‘revert to’ interest rate or Standard Variable Rate (SVR) fell to 7.27%. For comparison, the highest recorded figure was 8.19% in November and December 2023.
The total product selection decreased month-on-month to 6,998 options.
The combination of deal availability at both the 95% and 90% loan-to-value tiers increased to 1,362 options, which remains the highest in 17 years (1,532 – March 2008).
Commenting on the latest figures, moneyfacts financial expert Rachel Springall said:
“Borrowers may be disappointed to see fixed mortgage rates rise. Volatile swap rates and a cautious approach among lenders have led to an abrupt halt to consecutive monthly average rate declines.”
She added that the shift in sentiment towards pre-pricing and product churn in September had led to an increase in the average mortgage lifespan to 22 days, the first jump above 20 days in six months.
“This increase is likely due to a calming mortgage market, so it will be interesting to see if activity picks up as lenders need to meet their year-end targets.”
Springall stressed that it was not all doom and gloom for borrowers as the mortgage market had shown how much it had improved in recent years. Borrowers who took out a two-year fixed rate in October 2023 would have paid an average of 6.47% interest, compared to 4.98% now. That is a difference of €225 per month in repayments on a mortgage of €250,000 over a period of 25 years.
“The impact of rising fixed rates and subdued sentiment is dampening government pressure on lenders to do more to boost UK growth. But even with a slight decline in product choice across the mortgage spectrum, the combined number of deals available to borrowers with a 5% or 10% deposit or equity is at a 17-year high.”
She concluded: The relaxation of loan-to-income ratio rules is a positive step in improving mortgage affordability challenges, but first-time buyers are still waiting for more affordable housing to be built.”