Mortgage rates across the UK have reached two-year highs, with major lenders withdrawing products priced below 5%. Barclays, for example, removed its 4.75% two-year fixed rate and 4.93% five-year deal for new customers this week, leaving its best rates above 5%. Nationwide, Virgin Money, and TSB have also announced rate increases.
Data from Moneyfacts indicates that the average two-year fixed mortgage rate is now at its highest level since July 2024, while the average five-year home loan rate has reached its highest point since October 2023.
These rising rates coincide with signs of weakening property market activity and inflation currently at 3.1%. Bank of England Governor Andrew Bailey has suggested the Bank Rate may need to increase from its current 3.75% to address inflationary pressures.
The Bank of England's Monetary Policy Committee is scheduled to announce its next decision on 5th November. The Bank has maintained the current rate at recent meetings, including September, though some MPC members voted for an increase.