RatesMarket noteTuesday 6 October 2026, 07:00
UK mortgage rates: five-year fixes hit 6%, a three-year high
UK mortgage rates are at three-year highs: the average five-year fix is 6.00% and sub-5% fixed deals have almost gone, as gilt yields and BoE rate bets climb.
By The Notebook Desk
UK mortgage rates are back at their highest in three years. The average five-year fixed rate rose to 6.00% on Monday, its highest since late September 2023, Moneyfacts said. The average two-year fix rose to 5.98%, the highest since mid-December 2023. Neither average had been above 6% for about three years.
The cheapest deals have almost gone. At the start of September there were 1,494 fixed-rate mortgages priced below 5%, leaving out deals only for Northern Ireland. Now there are nine. Variable-rate deals below 5% barely changed, falling from 411 to 389.
The big lenders raised prices again and again. Barclays increased selected fixed rates four times in September, and HSBC, Lloyds Bank, Nationwide, NatWest, Santander and TSB three times each.
Why mortgage rates are rising
Lenders set the price of a fixed mortgage from what it costs them to borrow money for the same term, and that cost moves with gilt yields. “As wholesale funding costs climb on the back of rising gilt yields, fixed rate adjustments are somewhat inevitable,” said Rachel Springall of Moneyfacts.
Gilt yields have climbed fast. The five-year gilt yield, on the Bank of England’s zero-coupon estimate, reached 4.98% on 28 September, the highest since July 2008. It stood at 4.92% on 1 October, up from 4.60% at the end of August and 3.97% at the start of the year.
Part of the rise is global. Bond yields have risen across rich countries, and the US 10-year Treasury yield reached 5.31% on 5 October, Treasury data show. We wrote on 5 October that 1987 is the wrong warning for this bond sell-off.
A rate rise from the Bank of England is now expected
The other part is at home. Bank Rate is 3.75%, where it has been since December 2025. But markets now expect the Bank to raise it. Prices in the money markets give an 84% chance of a quarter-point rise at the meeting on 5 November, and put Bank Rate at about 4.30% by February 2027, according to Central Bank Watch.
Inflation explains why. Consumer prices rose 3.1% in the year to August, up from 2.9% in July, the Office for National Statistics reported, well above the Bank’s 2% target.
How this differs from 2023
The last time five-year fixes cost this much, in late September 2023, Bank Rate was at its peak of 5.25%, and the five-year gilt yield was about 4.27%, the Bank of England’s figures show. Bank Rate then stood almost a point above the five-year yield. Today Bank Rate is a point and a half lower, at 3.75%, and stands more than a point below the five-year yield. The 6% mortgage of 2023 came at the top of a cycle of rises. This one comes with markets expecting the cycle to start again.
What it costs borrowers
The difference is large. On a £200,000 repayment mortgage over 25 years, a rate of 6.00% means monthly payments of about £1,289, against about £1,169 at 5%. That is about £120 more a month, or more than £1,400 a year.
Moneyfacts suggested that some borrowers may look at variable deals, such as base-rate trackers, especially ones without early repayment charges. A tracker follows Bank Rate, though, so its cost would rise if the Bank raises rates in November. Borrowers near the end of a fixed deal can often secure a new one three to six months before it ends, depending on the lender.
What to watch for UK mortgage rates
- This week: further changes from the big lenders, and whether the averages move above 6%.
- 21 October: UK consumer prices for September, from the ONS.
- 5 November: the Bank of England’s decision, with an 84% chance of a rise priced in.
- Gilt yields: the five-year yield, the main driver of lenders’ funding costs for five-year fixes.
Disclosure
This is analysis and opinion, not investment advice.