"As has been the case since October 2022, the average five-year fixed mortgage rate remains below its two-year counterpart, which edges ever closer to 6%, not seen since December 2023."
- Rachel Springall, finance expert at Moneyfactscompare
The average two-year fixed rate mortgage is now 5.91%, up from 5.80% last month, according to the latest figures from Moneyfacts.
The average five-year fix has also increased from 5.39% to 5.48%.
However, both rates remain below their peaks of 6.29% and 5.86% seen in November 2023.
However, the average 10-year fixed rate mortgage has risen from 5.75% to 5.97% since November 2023.
The average standard variable rate stands at 8.18% this month, down from 8.19% in November 2023.
Rachel Springall, finance expert at Moneyfactscompare, said: “Borrowers may be disappointed to see fixed mortgage rates are on the rise. As has been the case since October 2022, the average five-year fixed mortgage rate remains below its two-year counterpart, which edges ever closer to 6%, not seen since December 2023.
"Lenders have been busy reviewing their fixed rate pricing in response to volatile swap rates, seeing month-on-month rises. However, fixed rates are lower than they were six months ago, so consumers who are now coming off a two or five-year fixed mortgage would be wise to act quickly to grab a competitive deal, particularly as some lenders have withdrawn deals priced below 5%. The mortgage market continues to be fluid despite no change to the Bank of England base rate since August 2023, and market forecasts have pushed back imminent cuts, due to stubborn inflation.
“Affordability continues to pose a challenge to buyers due to interest rates being higher than they may have expected this year, but also the persistent lack of affordable housing. This is having a notable impact on first-time buyers, who may have exhausted all their savings to raise a substantial deposit, and do not have the Bank of Mum and Dad’ to help them buy their first home.
"Those borrowers looking to remortgage may also face much higher repayments when they come off their deal, but they would still pay less with a fixed mortgage than on a revert rate, based on average rates. The average SVR stands above 8%, so it’s much higher than the average two-year fixed rate. A typical mortgage being charged the current average SVR of 8.18% would be paying around £290 more per month, compared to a typical two-year fixed rate (5.91%)."
