According to the latest interest rate monitor from Moneyfacts, mortgage rates continued to rise sharply this week, with more than thirty lenders raising rates and launching or withdrawing products.
The average mortgage rate rose from 5.66% on Monday to 5.76% today, the highest level since January 2024.
The average two-year fixed rate has risen from 5.77% to 5.89% in just days as lenders continue to respond to higher financing costs. The average five-year fixed interest rate has increased from 5.7% to 5.78%.
Nevertheless, product availability has increased, from 6,204 to 6,266 deals.
Mortgage products are slowly trickling back onto the market, but are returning at significantly higher prices, given the continued pressure on swap rates and financing costs.
Adam French, head of consumer finance at Moneyfacts, said: “While most lenders pushed rates higher, a small number moved in the opposite direction, cutting prices or targeting specific types of borrowers.
“However, it is far too early to assume that rates have peaked; these cuts remain the exception rather than the rule. Most lenders continued to raise prices, often in addition to withdrawing and relaunching products, as they continued to make up for higher financing costs.”
Moneyfacts said the scale of the shock that the conflict in Iran has caused to the mortgage market is becoming increasingly clear.
Borrowers switching from an older five-year fixed deal are facing interest rate increases of more than 300 basis points, pushing monthly repayments on a £250,000 mortgage between £417 and £444 – more than £5,000 a year.
Even the most competitive deals have changed significantly. The lowest available two-year fixed rate with an LTV of 60% has risen by 115 basis points since the start of the conflict, from 3.51% to 4.66%.
Notable changes this week
Atomic bank – Fixed rates increased by 15bps
Bank of Ireland Intermediaries – Fixed rates increased by a maximum 19bps; selected products withdrawn
Bank of Ireland, UK – Fixed rates increased by a maximum 17bps and then until 19 fps; selected products have been withdrawn and others have been launched
Barclays Mortgage – Selected variable rates reduced by 15 fps; selected fixed rates increased by maximum 40 fps
Bath construction association – New fixed rate ranges launched (including Credit Repair, Rent a Room and core products); discounted variable rate, updated with a free appreciation incentive
Chorley Building Society – Discount on variable rates reduced by 31 fps And 15 fps
Coventry Building Society – selected fixed rates for starters reduced by maximum 11 fps
Furness Building Society – discounted variable rates increased by a maximum 30 fps
Gen H – Fixed rates increased by a maximum 18bps, and then declined by the same margins
Halifax – Fixed rates increased by a maximum 15bps (between intermediary and direct); end dates extended
Hinckley & Rugby Building Society – New reduced variable interest rates have been launched for borrowers taking out a new mortgage
Hodge – Mortgage offer relaunched with new fixed rates Resi Retire, RIO and Hodge Resi
Leeds Building Society – Existing products withdrawn; Extensive new fixed interest rates launched (including FTB, refinancing, Reach and Income Plus)
Leek building association – Fixed rates increased by 20bps
Lloyd’s Bank – Fixed rates increased by a maximum 15bps; end dates extended
Marsden Building Association – New fixed rates RIO and Later Life launched
NatWest – Fixed and tracker rates increased by 28bps
NatWest Int. Sols – Fixed and tracker rates increased by 28bps
National Construction Association – Fixed rates increased by a maximum 25bps; trackers through 10bps
Newcastle Building Society – Selected fixed rates increased by maximum 25 fps or reduced by maximum 14 fps. New products launched and end dates extended
Nottingham Building Society – Fixed rates reduced by maximum 21 fps. New fixed rates launched
Progressive construction company – Fixed and reduced variable rates increased by a maximum 51 fps
Royal Bank of Scotland – Fixed and tracker rates increased by 28 fps
Skipton Building Society – Fixed rates increased (by 25 fps and until 6 fps)
TSB – Fixed rates increased by 50 fps
The mortgage lender – Fixed rates increased by 35 fps
West Brom Building Society – Selected fixed rates withdrawn