Average five-year fixed mortgage rates in the UK have reached 6.00% for the first time since September 2023, according to data from Moneyfacts. The two-year fixed rate stands at 5.98%, its highest level since December 2023.
Banks and building societies attributed the increase to turbulence in bond markets, which raises their costs for funding mortgages. The turmoil in money markets has also lifted market expectations that the Bank of England will raise its base rate.
The climb in fixed rates reflects how lenders price mortgages based on longer-term wholesale funding costs, not just current base rates. When bond markets become volatile or when investors demand higher returns, those costs feed directly into what banks charge borrowers.