Average five-year fixed mortgage rates in the UK have reached 6pc for the first time in three years, as fears of rising interest rates prompted lenders to raise prices. Major lenders including Barclays, HSBC, Lloyds Bank, Nationwide, NatWest, Santander and TSB increased their rates at least three times in September, with international instability and the ongoing Iran conflict pushing up prices. According to financial analysts Moneyfacts, the average five-year mortgage rose to 6pc on Monday, its highest since September 2023, while the average two-year fix stood at 5.98pc. Just nine five-year mortgage deals below 5pc remained on the market as of Monday morning, down from more than 1,500 at the start of the month, meaning 99pc of sub-5pc deals had disappeared. Swap rates, used by banks to price mortgages, jumped dramatically between Sept 28 and the beginning of October, rising to close to the Bank Rate of 3.75pc. On a £250,000 five-year fixed-rate mortgage, the difference between a 6pc rate and the 4.94pc average rate in February, before the Iranian conflict began, would add more than £9,400 over the five years. Borrowers can still secure variable rates at less than 5pc, with 389 such mortgages available, down from 411 at the beginning of September. The Bank of England chose not to increase the central rate from 3.75pc at its last Monetary Policy Committee meeting, but financial markets strongly predict at least one rate increase by the end of the year, potentially at the next meeting, days after John Healey's first Budget as Chancellor on Oct 28.
Barclays PLC
HSBC Holdings PLC
Lloyds Banking Group PLC
Nationwide Building Society
NatWest Group PLC
Banco Santander SA ADR
