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Homebuyers and those looking to remortgage might have heaved a sigh of relief last August when the base rate was cut, but may now be wondering why fixed mortgage rates have ticked up rather than down.
Nationwide and Natwest are among the latest lenders who’ve announced increases to their fixed mortgage rates in recent days, with similar changes made by Santander, HSBC, and Virgin Money.
According to Moneyfacts’ latest UK Mortgage Trends Treasury report, the average two-year fixed mortgage rate rose month-on-month for the first time since February 2025 in October from 4.96% to 4.98%, while the average five-year fixed mortgage rate similarly increased for the first time in eight months from 5.00% to 5.02%.
So why are fixed mortgage rates rising when interest rates fell in the summer? 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 ongoing economic uncertainty, although they have eased slightly following September’s inflation numbers, which were lower than expected.
Alice Haine, Personal Finance Analyst at Bestinvest by Evelyn Partners, the online investment platform, said: “While affordability has improved in recent months – thanks to a combination of five interest rate cuts since August last year, more relaxed stress test rules from lenders and more competitive pricing from sellers – shifting interest rate expectations prompted several lenders to increase mortgage rates this month though the better-than-expected inflation figure may help to improve that outlook.
“For existing borrowers planning to remortgage soon, new deals will vary. Those coming off short-term fixes, secured when mortgage rates were peaking in 2023, may be able to source better deals now. But for borrowers nearing the end of ultra-low, long-term fixes taken out before interest rates began their rapid ascent in December 2021, the outlook is gloomier. They still face a painful jump in monthly repayments, unless they’ve significantly reduced their outstanding balance.”
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.
David Hollingworth, associate director at L&C Mortgages, said: “Any borrower agonising over whether to take a fixed rate now should reach a decision sooner rather than later. There are still some extremely sharp rates on offer but these are bound to be feeling the pressure.
“Applying for a deal will secure the rate and avoid any further increases. At the same time they can still review the deal if rates do subsequently drop back.”
Learn more in our guide Should I remortgage now?
Where can I find the cheapest mortgage deals?
Mortgage rates fluctuate all the time, so the cheapest deal today might be pulled tomorrow.
A spokesman for financial website Moneyfactscompare.co.uk said: “It’s not all doom and gloom as the mortgage market has come a long way in recent years.
“For instance, those who locked into a typical two-year fixed deal in October 2023 (at 6.47%) could save £225 per month if they refinanced with a similar mortgage today.
“They also have a larger number of products to choose from; although the amount of mortgage deals on the market dipped below 7,000 (to 6,998) between September and October, this far outweighs the 5,495 available two years ago.”
It’s important to note that the best deal for you will depend on your individual circumstances, such as 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, it’s worth seeking professional help from a mortgage broker or independent financial advisor 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 2025. 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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