UK Mortgage Rates Edge Up: Fixed-Rate Deals Affected by Increase

The two-year fixed mortgage rate has risen to 6.8% from 6.79% the previous day, while five-year fixed rates have also increased slightly to 6.32% from 6.31%.

This is the first time that mortgage rates have risen in months, and the increase comes after a brief fall in inflation.

The news is likely to be a blow to the UK's many mortgage holders, as the majority of them are on fixed-rate deals.

With over 400,000 people expected to move off existing fixed deals between July and September, many will be faced with the prospect of higher monthly repayments.

Recent inflation figures, which showed a larger-than-expected fall to 7.9% last month, had given hope to under-pressure mortgage borrowers.

However, this hope may be short-lived, as experts have suggested that the Bank of England's policymakers may opt for a smaller increase in interest rates, rather than the expected 0.5 percentage point rise.

Despite the recent rise in mortgage rates, the cost of mortgages is still far lower than it was a few years ago.

Just two years ago, in October 2021, the average rate on a five-year deal was just 2.55%.

For those who have recently agreed to a new fixed rate, mortgage bills are still up markedly from the years of ultra-low interest rates.

Overall, the rise in mortgage rates is likely to be a concern for many UK homeowners, particularly those on fixed-rate deals.

However, with the Bank of England's policymakers expected to make a decision on interest rates in August, there is still hope that mortgage rates may fall in the near future.