London Daily

Focus on the big picture.
Sunday, Aug 30, 2026

Average five-year mortgage rate hits 12-year high

Average five-year mortgage rate hits 12-year high

The interest rate on a typical five-year fixed rate mortgage has topped 6% for the first time in 12 years.

The typical deal now has a rate of 6.02%, the financial information service Moneyfacts says, a level not seen since February 2010.

Mortgage rates have been rising for months, but saw a sharp increase following the mini-budget last month.

The latest rise in rates comes as the heads of major UK lenders met the Chancellor, Kwasi Kwarteng.

Bosses from banks such as Barclays, NatWest and Lloyds Banking Group attended the meeting which was part of a regular series of talks, but the latest developments in the mortgage market were discussed.

Rates have jumped sharply in the past couple of weeks, and hundreds of mortgage deals have been taken off the market.

A Treasury statement following the meeting said that "while it is the responsibility of the sector to provide the best value for mortgage rates", the chancellor confirmed the Treasury would "continue to work closely with the sector" in the weeks and months ahead.

Source : Moneyfacts.co.uk


Earlier this week, the rate on a typical two-year fixed rate mortgage breached 6% for the first time in 14 years, and by Thursday had hit 6.11%, according to Moneyfacts.

First-time buyers and those looking to re-mortgage are affected. An average of at least 100,000 people a month are coming to the end of their current mortgage, and face a significant rise in their monthly repayments.

Research from housing market website BuiltPlace suggests that rates of 6% mean that repayments on an average new mortgage will account for more than a quarter of household income. That is the highest burden on households since the recession of the early 1990s.

Uncertainty over future interest rates after the mini-budget led lenders to pull more than a thousand deals from the market.

They are slowly starting to return - there were 3,961 products a fortnight ago, now there are 2,430 - but have become more expensive on average.

Earlier this week, the UK's biggest mortgage lender, the Halifax, which is part of Lloyds Banking Group, raised its rates on a range of deals for new borrowers to well over 5%.

Mortgage brokers say lenders are "playing safe" with rates amid current economic uncertainty, but costs could eventually start to dip.

Newsletter

Related Articles

0:00
0:00
Close
UK Officials Highlight 80 Years of Diplomatic Relations With Philippines
Heavy Rain Disrupts Parts of England After Weeks of Extreme Summer Heat
More Than 200 Extra Police Officers Deployed Across Cleveland After Violent Incidents
Burnham Meets Northern Ireland Leaders for Talks on Economy and Youth Employment
Burnham to Abstain From UK Assisted Dying Vote
NHS Leaders Warn of Severe Financial and Staffing Pressures Ahead of Autumn
UK Treasury Prepares October Budget as Defense and Public Spending Pressures Mount
Scottish Government Publishes Draft Bill for Second Independence Referendum
Royal Navy Tracks Russian Warships and Sanctioned Vessels in 72-Hour Operation
UK and Ukraine Agree AI-Focused Defense Technology Partnership
US Reportedly Weighs Falkland Islands Policy Shift to Pressure UK Over NATO Spending
UK Government Mobilizes Emergency Aid as British Nationals Remain Missing After Nepal Floods
UK Hospitality Industry Reports Stronger Summer Trading but Seeks Tax Relief
Reform UK Proposes £30 Tax Credit for Long HMRC Helpline Waits
Labour Debates Caps on Political Donations Ahead of Future Elections
England Accelerates Housing and Planning Reforms Amid Affordability Crisis
NHS Expands Walk-In Community Health Centers to 40 Locations
UK Regulators Expect Meta to Apply Stronger Child Safety Standards Globally
UK Groups Demand Faster Transport Decarbonization After Extreme Summer Weather
UK Launches 10,000 Work Experience Placements as Youth Unemployment Concerns Rise
UK Government Faces Difficult Autumn Budget Choices Over Defense, Spending and Taxes
UK Government Rejects Calls to Slow AI Data Center Expansion
IMF Raises UK Growth Forecast to 1% Despite Global Supply Chain Risks
UK Unsecured Loan Defaults Reach Highest Level Since 2009
UK Energy Price Cap to Rise 4% to Three-Year High of £1,723
More Than 30 Britons Reported Missing After Deadly Nepal-Tibet Floods
Royal Navy Tracks Russian Warships and Sanctioned Vessels in 72-Hour Operation
Police Intensify Investigation Into Organised Crime-Linked Violence in Middlesbrough
UK Small Businesses Face Continued Revenue and Tax Pressures, Federation Says
M&G Real Estate Buys West Sussex Affordable Housing Portfolio for £29 Million
Royal Navy Warship HMS Tamar Visits Cambodia for Regional Security Engagement
UK Government Brings Forward Benefit Payments Ahead of August Bank Holiday
Four Men Plead Guilty to Arson Attack on Jewish Community Ambulances in North London
Ofgem Raises Great Britain’s Household Energy Price Cap by Four Percent From October
UK Government Rejects Green Party Call for Artificial Intelligence Datacentre Moratorium
Millions of UK Benefit Recipients Receive Payments Early Ahead of August Bank Holiday
UK Prime Minister Meets Northern Ireland Leaders in Belfast Over Budget Crisis
Crypto Tax Gains Reach One Point Three Eight Billion Pounds Among UK Investors, HMRC Data Shows
UK Corporate Confidence Rises to Highest Level Since March, Lloyds Survey Shows
Mike Ashley Attacks UK Government Business Rates and Cost-of-Living Policies
Scottish Universities Face Two Hundred Million Pound Annual Funding Gap, Report Warns
Entertainment Figures Urge UK Government to Protect People From AI Voice Cloning
Manchester Airports Group Confirms Customer Data Breached in Cyberattack
Seven Charged Over Vandalism at Donald Trump’s Turnberry Golf Resort in Scotland
Nearly 23,000 UK Households Expected to Move Home on Busiest Day of 2026
UK Benefit Payments to Arrive Early Ahead of August Bank Holiday
Reform UK Pledges to Replace GDPR and Cut Tax Administration Red Tape
Andy Burnham Launches Work Experience Plan for One Million Young People Outside Education or Work
Andy Burnham Faces Labour Backlash After Dropping Support for Political Donations Cap
Andy Burnham Announces UK-Wide Summit With Leaders of Scotland, Wales and Northern Ireland
×