Average five-year mortgage rate hits 6% for first time in three years
Key Takeaways
Average five-year fixed mortgage rates have climbed to 6%.
Deals priced below 5% have nearly vanished from the market.
Global economic instability and rising gilt yields are driving costs up.
Millions of homeowners face higher repayments through 2028.
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The average interest rate for a new five-year fixed mortgage has reached 6% for the first time in three years. This surge is driven by rising wholesale funding costs for lenders, fueled by global economic uncertainty and increased government borrowing costs following the onset of the Iran war.
Borrowers are facing a challenging landscape as the number of mortgage deals priced below 5% has plummeted by 99% since September. Financial experts warn that this trend is likely to persist, significantly impacting millions of homeowners who need to renew their fixed-rate deals by 2028.
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