For the first time in over eight months, UK fixed mortgage rates have inched upward, signalling a subtle change in mortgage market dynamics.
The latest figures from financial information service Moneyfacts reveal that the average two-year fixed mortgage rate increased marginally by 0.02% to 4.98%, while the five-year fixed rate rose to 5.02%.
This ends a prolonged period of steady decline since February 2025, marking the first month-on-month rise in rates for over half a year.
However, despite these increases, rates remain substantially lower than a year ago.
For example, the two-year fixed rate has fallen from 5.40% in October 2024 to just under 5% now, representing a meaningful reduction and better affordability for borrowers compared to last year.
Why are rates rising now?
Intriguingly, these shifting rates coincide with behavioural changes in lenders’ product offerings.
The average shelf-life of mortgage products — the time they remain available to consumers — has lengthened from 17 to 22 days, surpassing 20 days for the first time in six months.
This signals a deceleration in mortgage product turnover, reflective of lenders adopting a more cautious stance amid volatile swap rates and an uncertain economic backdrop.
According to Rachel Springall, finance expert at Moneyfacts, this slower churn in mortgage deals might hint at a stabilising market.
However, there could be a surge in activity towards the end of the year as lenders aim to hit sales targets.
What does it mean for borrowers?
While any increase in rates can cause concern, the mortgage environment today remains far improved compared to peak periods last year.
Borrowers who fixed rates in October 2023 at around 6.47% are now paying nearly 1.5 percentage points less, roughly translating to a saving of about £225 a month on a £250,000 loan over 25 years.
This indicates that, despite the recent uptick in fixed rates, the mortgage landscape remains much kinder to borrowers relative to a year ago, cushioning household budgets in uncertain economic times.
Meanwhile, mortgage deal options have dipped slightly month-on-month to 6,998 but remain abundant, giving borrowers a healthy choice, and lending products for buyers with smaller deposits (90%-95% LTV) have increased to 1,362 choices — the highest in 17 years.
This expansion helps first-time buyers and those with less upfront equity have easier access to the market.
On the variable rate front, the two-year tracker mortgages have increased to 4.67%, while the Standard Variable Rate (SVR) declined to 7.27% from a recent peak of 8.19% late last year.
These shifts indicate that lenders are fine-tuning their offerings within a complex economic backdrop, balancing risk and competitiveness.
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What’s next for the UK mortgage market?
This modest rise could mark a turning point from a prolonged downward trend in mortgage rates, and is likely more a case of normalisation than a reversal of fortune for borrowers.
Key points for borrowers and observers include:
Market stability: Longer product shelf-life and cautious lender pricing may point to more stable conditions ahead.
Year-end activity: Lenders may ramp up mortgage products and offers towards the year-end to meet targets, potentially affecting rate movements.
Ongoing vigilance: Borrowers should monitor developments closely, especially if considering fixing rates or switching mortgages.
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