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Average two- and five-year fixed mortgage rates jumped month-over-month for the first time since February, according to a financial information website.
moneyfacts Average mortgage rates on the market were recorded at the beginning of each month – and found that, across all deposit sizes, the average two-year fixed rate mortgage rose from 4.96% in September to 4.98% in October.
The average five-year fixed rate rose to 5.02% in October from 5.00% in September.
MoneyFacts said the average shelf-life of mortgage products typically increased from 22 days in October to 17 days in September due to a “mixed move” from lenders.
MoneyFacts said this is the first time that the average shelf-life has gone above 20 days since April 2025, when it was 21 days.
Rachel Springall, a finance expert at MoneyFacts, said: “Borrowers may be disappointed to see fixed mortgage rates rise.
“The sustained monthly average rate decline has come to an abrupt halt due to volatile swap rates and a cautious outlook among lenders.”
He said that with sticky inflation, “any imminent base rate cut by the Bank England Seems unlikely”.
Ms Springall said: “It’s not all doom and gloom for borrowers, as the mortgage market has shown how much it has improved in recent years.
“Borrowers who signed a two-year fixed rate deal in October 2023 will be paying an average of 6.47% interest, compared to 4.98% now.
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“That’s a difference of £225 per month in repayments on a £250,000 mortgage over 25 years.”
Simon Gammon, managing partner at Knight Frank Finance, said: “Inflation has come close to double the Bank of England’s 2% target in recent months, and consumers’ inflation expectations are beginning to rise.
“Both factors have unsettled policymakers and prevented the steady decline in mortgage rates that we have seen since the early spring.
“Lenders have responded cautiously, some aging rates are higher and overall averages have increased slightly.
“This is not likely to be the beginning of a sustained rise in borrowing costs, but rather a prolonged plateau while the outlook becomes clearer.
“This pause is likely to weigh on housing market activity, which was already showing signs of slowing before November Budget “Amidst speculation over possible changes to property and personal taxation.”
On Monday, housebuilders Barrett Redrow and Persimmon unveiled a new 5% deposit scheme, backed by barclays And tsb,
Under the Raised scheme, home buyers will be required to provide a 5% deposit, while the Raised Equity Loan will cover 15% of the market value of the property, up to a maximum loan amount of £100,000.
The remaining 80% of the purchase price will be financed through a mortgage from Barclays or TSB. Different terms and conditions will apply.
The people behind the initiative said that while the product will initially only be available to buyers of Barrett Redrow and Persimmon homes, the scheme will be rolled out across England.
He said the scheme is designed to support first-time buyers entering the property market as well as those looking to move into new homes.