The average UK five-year fixed mortgage rate reached 6% on October 5.
Why it matters: Higher refinancing costs will pressure household budgets and could weigh on housing demand and discretionary spending. Borrowers are also more exposed to future Bank of England policy as inflation remains above target.
- The average five-year fixed rate reached 6.00%, while the average two-year rate rose to 5.98%.
- Sub-5% fixed-rate products excluding Northern Ireland fell from 1,494 at the start of September to nine by October 5.
- The Bank of England held Bank Rate at 3.75% in September, but three MPC members voted for a rise to 4%.
- About 1.8 million fixed-rate mortgages are due to mature in 2026, according to UK Finance.
UK mortgage pricing has crossed a threshold that had been absent for roughly three years. The average five-year fixed rate reached 6.00% on October 5, its highest level since late September 2023, while the average two-year fixed rate rose to 5.98%, according to Moneyfacts.
The move reflects lender repricing rather than a new Bank of England decision. Moneyfacts attributed the increases to volatility in swap rates and higher wholesale funding costs linked to rising gilt yields. The Bank said higher short-term overnight-index swap rates had already passed rapidly into household lending rates.
The supply of cheaper deals has collapsed. Excluding Northern Ireland-only products, the number of fixed-rate mortgages priced below 5% fell from 1,494 at the start of September to nine on October 5. Including those products, the count dropped from 1,691 to 107.
Borrowers coming off older, cheaper deals face the sharpest adjustment. UK Finance estimated in March that refinancing a historically cheap five-year mortgage could increase monthly payments by about £395. That estimate is dated and will vary with the loan balance, loan-to-value ratio and lender.
Housing indicators are already softening. Mortgage approvals fell to 54,900 in August from 55,900 in July, while Nationwide reported a 0.2% monthly fall in house prices in September and annual growth of 0.8%.
By the numbers
- 6.00% - average five-year fixed mortgage rate on October 5
- 94% - decline in sub-5% fixed deals including Northern Ireland-only products during September
- £395 - estimated average monthly increase for some borrowers refinancing cheap five-year deals
Yes, but: The 6.00% figure is an average of available products, not the rate every borrower will receive. Actual pricing depends on the borrower, loan-to-value ratio, fees, term and lender, while the £395 payment estimate was prepared using March rates.
What's next: The Bank of England's next scheduled policy meeting ends on November 5, 2026.