Mortgage monitor service Moneyfacts saysthe overall average two- and five-year fixed mortgage rates rose month-on-month for the first time in eight months. Mortgage shelf-life rose to 22 days and overall product choice dipped slightly below 7,000 options.
Shorter-term fixed mortgages have seen sharper falls over the past 12 months. At the start of October 2024, the average five-year fixed rate was 5.07%; compared to the start of this month, the rate is 0.05% lower at 5.02%. However, the average two-year fixed rate has fallen by 0.42% over the same period, down from 5.40% to 4.98%.
The Moneyfacts Average Mortgage Rate rose for the first time since February 2025 to 5.02%. The rate is up from 5.00% month-on-month, lower than 5.30% in October 2024, and much lower than 6.21% in October 2023.
The mixed moves from lenders led to a rise in the average life of a mortgage, up to 22 days, from 17 days a month prior. This is the first time the average shelf-life has moved above 20 days for six months (21 days – April 2025).
The average two-year tracker variable mortgage rate rose to 4.67%. The average ‘revert to’ rate or Standard Variable Rate (SVR) fell to 7.27%. In comparison, the highest recorded was 8.19% during November and December 2023.
Product choice overall fell month-on-month, to 6,998 options.
The combination in availability of deals at both the 95% and 90% loan-to-value tiers rose to 1,362 options, which remains the highest count in 17 years (1,532 – March 2008).
A Moneyfacts spokesperson says: “There may be little margin of rate movement from lenders in the coming weeks, prolonging the subdued sentiment. Inflation is expected to peak at 4%, which would then be double the desired 2% target, so any imminent base rate cuts by the Bank of England seem unlikely. However, even with the three base rate cuts since the start of 2025, fixed mortgage rates can move up regardless, such as in reaction to volatile swap rates.
“It is not all doom and gloom for borrowers, as the mortgage market has shown how far it has improved over recent years. Borrowers who locked into a two-year fixed rate deal back in October 2023 would have been paying 6.47% in interest on average, compared to 4.98% now. That is a difference of £225 per month in repayments on a £250,000 mortgage over 25 years.
“The repercussions of rising fixed rates and subdued sentiment stifle the Government’s push for lenders to do more to boost UK growth. However, even with a slight dip in product choice across the mortgage spectrum, the combined quantity of deals available to borrowers with a 5% or 10% deposit or equity stands at a 17-year high.
“The relaxation of loan-to-income rules is a positive step for improving mortgage affordability challenges, but first-time buyers are still waiting for more affordable housing to be built. Whether purchasing or refinancing, it remains essential borrowers seek independent advice to navigate the mortgage maze and not feel pressured to secure a deal because of the Budget rumour mill.”
In response to the Moneyfacts analysis, Simon Gammon – managing partner at Knight Frank Finance – comments: “Inflation has crept close to double the Bank of England’s 2% target in recent months, and consumers’ inflation expectations have started to rise. Both factors have unsettled policymakers and paused the steady decline in mortgage rates we’ve seen since early spring.
“Lenders have responded cautiously, with some edging rates higher and the overall average ticking up slightly. This is unlikely to mark the start of a sustained rise in borrowing costs, but rather a prolonged plateau while the outlook becomes clearer.
The pause is likely to weigh on housing market activity, which was already showing signs of softening ahead of the November Budget amid speculation about potential changes to property and personal taxation.
“That said, some of the most competitive fixed-rate products remain available around 3.8%, and now may be a sensible time to lock in. If rates improve later, most borrowers can renegotiate before completion, so it’s worth securing a good deal while it’s on the table.”
