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Homebuyers and those looking to remortgage might have heaved a sigh of relief this month when the base rate was again held at 3.75%, but may now be wondering why fixed mortgage rates are ticking up rather than down.
NatWest, Santander, HSBC and TSB are among lenders who have increased selected fixed mortgage rates for a second time this month.
According to Moneyfactscompare, the average two-year fixed mortgage deal rose from 5.63% at the beginning of August to 5.73% in mind-September, while the average five-year fixed mortgage rate made an even bigger jump from 5.66% to 5.78% over the same timeframe.
“The mortgage pain shows no sign of easing for those borrowers who cannot yet lock into a new deal, particularly those with a five-year fix who are not due to refinance until 2027,” said Rachel Springall, spokesman for Moneyfactscompare. “Back in February 2022, there were sub-2% fixed mortgages available, so moving off this rate will be a huge shock for borrowers,” she added.
So why are fixed mortgage rates rising when interest rates haven’t changed? Here, we explain why fixed deals are going up, and what you can do to keep your mortgage costs down.
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Want to speak to a mortgage adviser? Speaking to an experienced adviser can help you to understand your options and get a great deal on your mortgage.
If you’re looking for expert mortgage advice, you can get a free consultation with an independent mortgage adviser at Fidelius. Speak with a qualified, FCA-regulated, independent mortgage adviser you can trust. Rated 4.7/5 on VouchedFor from over 2,600 reviews.
What’s pushing fixed mortgage rates up?
Rather than being directly linked to the base rate, fixed mortgage rates are instead more closely tied to swap rates and overall market conditions.
Swap rates are the rates that lenders agree to pay the financial institutions that lend them money to fund their mortgages, and they usually rise or fall in line with how the base rate is expected to move in future. You can read more about how swap rates work in our guide What are swap rates and how do they affect my mortgage?
Swap rates have risen recently due to the conflict in the Middle East, which has pushed up energy costs and triggered fears that inflationary pressures are continuing to grow. When inflation is higher, interest rates often rise to help take some steam out of the economy and bring prices down. Markets are currently expecting a rate hike in November, a total of three by March and as many as five by July.
Sarah Coles, head of personal finance at AJ Bell, said: “Mortgage misery is set to intensify. Fixed rates are set in the swaps market, which is driven by bond prices, which in turn move according to rate expectations. It means forecasts of more rate rises further down the line feed into higher mortgage rates. As a result, we’ve seen major lenders hike rates yet again – for the second time in a month, and this may not be the last of it.
“If you have a remortgage on the horizon – within the next six months – it’s worth locking in a deal now. If rates rise as expected in the interim, you will have secured a relatively affordable mortgage, and if they don’t, you can shop around again closer to the time.”
What should borrowers do?
If you’re planning to remortgage soon, or are looking to buy a property, don’t hang around if you spot a deal you like, as it could mean you miss out if it’s withdrawn and replaced with a higher rate deal.
Jason Hollands, managing director of investment platform Bestinvest, said: “Unless there is a quick resolution to the conflict in the Middle East, interest rates are more likely to rise than fall over the coming months, so households need to consider the financial implications. Anyone approaching the end of a fixed-rate mortgage deal should explore and secure the best available rate well ahead of the deadline. Many lenders will allow borrowers to switch to a cheaper product if rates improve before the new deal commences, although this depends on the lender’s terms.
“Some households coming to the end of a five-year deal at the moment will be coming off low loan rates secured before lenders started hiking in 2022, and the more they can do to cushion the blow the better.”
Learn more in our guide Should I remortgage now?
Where can I find the cheapest mortgage deals?
Mortgage rates fluctuate all the time, and
it’s important to note that the best deal for you will depend on your individual circumstances. These include how much you need to borrow, how big a deposit you have or how much equity if remortgaging, and whether you want a fixed rate or are comfortable with a variable rate, which will fluctuate over time.
Given how quickly rates can move, and the wide choice of deals available, it’s worth seeking professional help from a mortgage broker or independent financial adviser if you’re not sure which mortgage is likely to be the most cost-effective option for you. If you’re undecided whether you need advice, read our article Should I get advice on my mortgage?
Learn more about tracking down the best mortgage rates in our article How to get the best mortgage deal in 2026. Bear in mind that you should always look at the overall cost of any deal when considering how competitive it is, rather than concentrating on the headline rate alone. Find out more about this in our guide Why the lowest rate mortgage may not be the cheapest deal.
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Want to speak to a mortgage adviser? Speaking to an experienced adviser can help you to understand your options and get a great deal on your mortgage.
If you’re looking for expert mortgage advice, you can get a free consultation with an independent mortgage adviser at Fidelius. Speak with a qualified, FCA-regulated, independent mortgage adviser you can trust. Rated 4.7/5 on VouchedFor from over 2,600 reviews.
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