London Daily

Focus on the big picture.
Tuesday, Oct 21, 2025

Average two-year mortgage rate highest for 14 years

Average two-year mortgage rate highest for 14 years

The interest rate on a typical two-year fixed rate mortgage has breached 6% for the first time in 14 years.

The typical deal has a rate of 6.07%, the financial information service Moneyfacts says, a level not seen since the financial crisis in November 2008.

Mortgage rates have been going up for months, but recorded a sharp increase in response to the fall-out from the mini-budget nearly two weeks ago.

First-time buyers and those looking to remortgage 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.

"Borrowers may well be concerned about the rise to fixed mortgage rates but it is essential they seek advice to assess the deals that are available to them right now," said Rachel Springall from Moneyfacts.

"Fixing for longer may seem more appealing, particularly as both the average two- and five-year fixed rates rise to levels not seen in over a decade. Consumers must carefully consider whether now is the right time to buy a home or to wait and see how things change in the coming weeks."

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

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 2,371 - but have become more expensive on average.

Representatives from High Street banks and mortgage lenders are meeting Chancellor Kwasi Kwarteng on Thursday, with the current situation facing borrowers on the agenda. It is understood that this is the latest in a regular series of discussions.

Bosses from Barclays, Natwest and Lloyds Banking Group are expected to attend.

Source : Moneyfacts.co.uk


The interest rate on a new, average two-year fixed deal on the morning of the speech was 4.74%, compared with 6.07% now. That is a difference of about £170 a month on repayments for somebody borrowing £200,000 on a 30-year mortgage.

A five-year fixed deal has typically risen from 4.75% to 5.97% over the same period.

That leap will be much greater when compared to a borrower's previous deal taken out two or five years ago.

Some more specialist lenders, whose customers may include those with a chequered credit history or the recently self-employed, have been raising rates to 6.5-7% or more.

In the meantime, the average standards variable rate - which by nature are changeable and are paid by 900,000 homeowners - has gone up from 4.41% at the start of the year to 5.63% at the start of October.

During her speech at the Conservative Party conference, Prime Minister Liz Truss said that the government "will do what we can" to support homeowners. However, she said that the benchmark interest rate was set independently by the Bank of England.

Newsletter

Related Articles

0:00
0:00
Close
This Is How the 'Heist of the Century' Was Carried Out at the Louvre in Seven Minutes: France Humiliated as Crown with 2,000 Diamonds Vanishes
China Warns UK of ‘Consequences’ After Delay to London Embassy Approval
France’s Wealthy Shift Billions to Luxembourg and Switzerland Amid Tax and Political Turmoil
"Sniper Position": Observation Post Targeting 'Air Force One' Found Before Trump’s Arrival in Florida
Shouting Match at the White House: 'Trump Cursed, Threw Maps, and Told Zelensky – "Putin Will Destroy You"'
Windows’ Own ‘Siri’ Has Arrived: You Can Now Talk to Your Computer
Thailand and Singapore Investigate Cambodian-Based Prince Group as U.S. and U.K. Sanctions Unfold
‘No Kings’ Protests Inflate Numbers — But History Shows Nations Collapse Without Strong Executive Power
Chinese Tech Giants Halt Stablecoin Launches After Beijing’s Regulatory Intervention
Manhattan Jury Holds BNP Paribas Liable for Enabling Sudanese Government Abuses
Trump Orders Immediate Release of Former Congressman George Santos After Commuting Prison Sentence
S&P Downgrades France’s Credit Rating, Citing Soaring Debt and Political Instability
Ofcom Rules BBC’s Gaza Documentary ‘Materially Misleading’ Over Narrator’s Hamas Ties
Diane Keaton’s Cause of Death Revealed as Pneumonia, Family Confirms
Former Lostprophets Frontman Ian Watkins Stabbed to Death in British Prison
"The Tsunami Is Coming, and It’s Massive": The World’s Richest Man Unveils a New AI Vision
Outsider, Heroine, Trailblazer: Diane Keaton Was Always a Little Strange — and Forever One of a Kind
Dramatic Development in the Death of 'Mango' Founder: Billionaire's Son Suspected of Murder
Two Years of Darkness: The Harrowing Testimonies of Israeli Hostages Emerging From Gaza Captivity
EU Moves to Use Frozen Russian Assets to Buy U.S. Weapons for Ukraine
Europe Emerges as the Biggest Casualty in U.S.-China Rare Earth Rivalry
HSBC Confronts Strategic Crossroads as NAB Seeks Only Retail Arm in Australia Exit
U.S. Chamber Sues Trump Over $100,000 H-1B Visa Fee
Shenzhen Expo Spotlights China’s Quantum Step in Semiconductor Self-Reliance
China Accelerates to the Forefront in Global Nuclear Fusion Race
Yachts, Private Jets, and a Picasso Painting: Exposed as 'One of the Largest Frauds in History'
Australia’s Wedgetail Spies Aid NATO Response as Russian MiGs Breach Estonian Airspace
McGowan Urges Chalmers to Cut Spending Over Tax Hike to Close $20 Billion Budget Gap
Victoria Orders Review of Transgender Prison Placement Amid Safety Concerns for Female Inmates
U.S. Treasury Mobilises New $20 Billion Debt Facility to Stabilise Argentina
French Business Leaders Decry Budget as Macron’s Pro-Enterprise Promise Undermined
Trump Claims Modi Pledged India Would End Russian Oil Imports Amid U.S. Tariff Pressure
Surging AI Startup Valuations Fuel Bubble Concerns Among Top Investors
Australian Punter Archie Wilson Tears Up During Nebraska Press Conference, Sparking Conversation on Male Vulnerability
Australia Confirms U.S. Access to Upgraded Submarine Shipyard Under AUKUS Deal
“Firepower” Promised for Ukraine as NATO Ministers Meet — But U.S. Tomahawks Remain Undecided
Brands Confront New Dilemma as Extremists Adopt Fashion Labels
The Sydney Sweeney and Jeans Storm: “The Outcome Surpassed Our Wildest Dreams”
Erika Kirk Delivers Moving Tribute at White House as Trump Awards Charlie Presidential Medal of Freedom
British Food Influencer ‘Big John’ Detained in Australia After Visa Dispute
ScamBodia: The Chinese Fraud Empire Shielded by Cambodia’s Ruling Elite
French PM Suspends Macron’s Pension Reform Until After 2027 in Bid to Stabilize Government
Orange, Bouygues and Free Make €17 Billion Bid for Drahi’s Altice France Telecom Assets
Dutch Government Seizes Chipmaker After U.S. Presses for Removal of Chinese CEO
Bessent Accuses China of Dragging Down Global Economy Amid New Trade Curbs
U.S. Revokes Visas of Foreign Nationals Who ‘Celebrated’ Charlie Kirk’s Assassination
AI and Cybersecurity at Forefront as GITEX Global 2025 Kicks Off in Dubai
DJI Loses Appeal to Remove Pentagon’s ‘Chinese Military Company’ Label
EU Deploys New Biometric Entry/Exit System: What Non-EU Travelers Must Know
Australian Prime Minister’s Private Number Exposed Through AI Contact Scraper
×