Mortgage rates have reached their highest level in three years, with the average new mortgage rate now at 5.89%, an increase from 5.83% in early October. This marks the highest point since November 2023, according to Moneyfactscompare.co.uk.
Despite this overall rise, some major lenders are cutting rates on specific products. Nationwide has reduced rates by up to 0.15 percentage points, while Halifax and Barclays have introduced cuts of up to 0.22 and 0.30 percentage points respectively. These reductions suggest growing competition, particularly for remortgage business.
The average two-year fixed rate has risen from 4.83% in January to 5.97% in November, its highest since December 2023. For a £250,000 mortgage over 25 years, this increase adds £169 to monthly repayments, totalling £2,028 annually. The average five-year fixed rate is 6%, and the typical 10-year fix stands at 6.32%.
These changes come ahead of the Bank of England's interest rate decision, with economists anticipating a 0.25 percentage point rise in Bank Rate. Tracker mortgage borrowers and those on standard variable rates could face more immediate impacts from a Bank Rate increase.