London Daily

Focus on the big picture.
Saturday, Feb 22, 2025

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 Prison Officer Sentenced for Inappropriate Conduct with Inmate
Good News: Senate Confirms Kash Patel as FBI Director
Officials from the U.S. and Hungary Engage in Talks on Economic Collaboration and Sanctions Strategy
James Bond Franchise Transitions to Amazon MGM Studios
Technology Giants Ramp Up Lobbying Initiatives Against Strict EU Regulations
Alibaba Exceeds Quarterly Projections Fueled by Growth in Cloud and AI
Tequila Sector Faces Surplus Crisis as Agave Prices Dive Sharply
Residents of Flintshire Mobile Home Park Grapple with Maintenance Issues and Uncertain Future
Ronan Keating Criticizes Irish Justice System Following Fatal Crash Involving His Brother
Gordon Ramsay's Lucky Cat Restaurant Faces Unprecedented Theft
Israeli Family Mourns Loss of Peace Advocate Oded Lifschitz as Body Returned from Gaza
Former UK Defense Chief Calls for Enhanced European Support for Ukraine
Pope Francis Admitted to Hospital in Rome Amid Rising Succession Speculation
Senate Republican Leader Mitch McConnell, at the age of 83, Declares His Retirement.
Whistleblower Reveals Whitehall’s Focus on Kabul Animal Airlift Amid Crisis
Politicians Who Deliberately Lie Could Face Removal from Office in Wales
Scottish Labour Faces Challenges Ahead of 2026 Holyrood Elections
Leftwing Activists Less Likely to Work with Political Rivals, Study Finds
Boris Johnson to Host 'An Evening with Boris Johnson' at Edinburgh's Usher Hall
Planned Change in British Citizenship Rules Faces First Legal Challenge
Northumberland Postal Worker Sentenced for Sexual Assaults During Deliveries
British Journalist Missing in Brazil for 11 Days
Tesco Fixes Website Glitch That Disrupted Online Grocery Orders
Amnesty International Critiques UK's Predictive Policing Practices
Burglar Jailed After Falling into Home-Made Trap in Blyth
Sellafield Nuclear Site Exits Special Measures for Physical Security Amid Ongoing Cybersecurity Concerns
Avian Influenza Impact on Seals in Norfolk: Four Deaths Confirmed
First Arrest Under Scotland's Abortion Clinic Buffer Zone Law Amidst International Controversy
Meghan Markle Rebrands Lifestyle Venture as 'As Ever' Ahead of Netflix Series Launch
Inter-Island Ferry Services Between Guernsey and Jersey Set to Expand
Significant Proportion of Cancer Patients in England and Wales Not Receiving Recommended Treatments
Final Consultation Launched for Vyrnwy Frankton Power Line Project
Drug Misuse Deaths in Scotland Rise by 12% in 2023
Failed £100 Million Cocaine Smuggling Operation in the Scottish Highlands
Central Cee Equals MOBO Awards Record; Bashy and Ayra Starr Among Top Honorees
EastEnders: Four Decades of Challenging Social Norms
Jonathan Bailey Channels 'Succession' in Bold Richard II Performance
Northern Ireland's First Astronaut Engages in Rigorous Spacewalk Training
Former Postman Sentenced for Series of Sexual Offences in Northumberland
Record Surge in Anti-Muslim Hate Crimes Across the UK in 2024
Omagh Bombing Inquiry Concludes Commemorative Hearings with Survivor Testimonies
UK Government Introduces 'Ronan's Law' to Combat Online Knife Sales to Minors
Metal Detectorists Unearth 15th-Century Coin Hoard in Scottish Borders
Woman Charged in 1978 Death of Five-Year-Old Girl in South London
Expanding Sinkhole in Godstone, Surrey, Forces Evacuations and Road Closures
Bangor University Announces Plans to Cut 200 Jobs Amid £15 Million Savings Target
British Journalist Charlotte Peet Reported Missing in Brazil
UK Inflation Rises to 3% in January Amid Higher Food Prices and School Fees
Starmer Defends Zelensky Amidst Trump's 'Dictator' Allegation
Zelensky Calls on World Leaders to Back Peace Efforts in Light of Strains with Trump
×