The average interest rate for new five-year fixed mortgage deals has reached 6%, marking the first time it has hit this level in three years. This increase comes as lenders face higher costs amid international concerns over rising prices and interest rates.
Since the beginning of September, around 1,500 mortgage deals priced below 5% have vanished, according to financial information service Moneyfacts. The average rate for two-year fixed mortgages currently stands at 5.98%.
The cost of home loans has been rising in recent weeks, with global economic uncertainty, including the Iran war, contributing to the increased cost of deals. Most homeowners and buyers use fixed mortgages, where the interest rate remains constant until the deal expires, typically after two or five years.