Average five-year mortgage rate hits 6% for first time in three years
Summary
The average interest rate for new five-year fixed mortgages has reached 6% for the first time in three years. This rise is due to higher lender costs, linked to global economic concerns and increased government borrowing, making home loans more expensive for buyers and those renewing mortgages.Key Facts
- The average five-year fixed mortgage rate is now 6%, the highest since September 2023.
- Two-year fixed mortgage rates have risen to an average of about 5.98%, the highest since December 2023.
- Around 1,500 mortgage deals with rates below 5% have disappeared since early September.
- Several major UK banks, including Barclays, HSBC, Lloyds, and NatWest, raised their fixed mortgage rates multiple times in September.
- Fixed-rate mortgages lock in the interest rate for usually two or five years, after which borrowers must renew at current rates.
- Rising international uncertainty, including conflicts like the Iran war, contributes to these higher borrowing costs.
- Financial experts advise borrowers nearing the end of a fixed deal to seek advice and carefully compare new mortgage options.
- Some lenders allow borrowers to lock in new rates up to three or six months before their current fixed mortgage period ends.
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