Average five-year fixed mortgage rate hits 6% for first time in three years

The average cost of a five-year fixed-rate mortgage has reached 6% for the first time in three years, driven by turmoil in the bond markets and rising expectations of a base rate increase. According to figures from financial information provider Moneyfacts, the average rate now stands at 6.00%, the highest since September 2023. The average two-year fixed rate is also nearing this mark at 5.98%, its highest since December 2023.

In recent weeks, major banks and building societies have raised their mortgage prices as instability in global bond markets has heightened expectations of a base rate rise. Borrowers in Great Britain have seen their options for fixed-rate mortgages priced below 5% dwindle to just nine options, a staggering 99% drop since the beginning of last month when there were 1,494 deals available at that level.