Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.

Average five-year mortgage fix hits highest level since 2023, Moneyfacts data shows

The average five-year fixed mortgage rate has reached 5.88%, its highest level since October 2023, when it last hit the same level in the aftermath of the Liz Truss mini-Budget. Moneyfacts' weekly rate watch data also shows the average two-year fixed rate climbing to 5.84%, the highest since 21 April.

Widespread lender repricing

The average two-year fixed rate jumped by 17 basis points and the five-year rate by 16 basis points over the past week, as a wave of lenders hiked prices. Moneyfacts finance expert Rachel Springall said fixed rate increases firmly dominated lender repricing.

The major banks all increased fixed rates, with NatWest raising rates by up to 43bps, Santander by up to 45bps, HSBC by up to 37bps, and TSB by up to 25bps. Halifax and Lloyds Bank increased selected fixed rates by up to 30bps, while Barclays increased rates by up to 20bps.

Low-deposit borrowers hit hardest

For low-deposit borrowers, the average two-year fixed at 95% loan-to-value surged from 6.15% to 6.33%, while the average five-year fix at the same LTV rose from 6.07% to 6.25%.

Uncertainty over future direction

Springall noted that swap rates remain near 30-day highs, so uncertainty persists over the future direction of fixed mortgage pricing, and more hikes could be coming if lenders have not yet caught up with higher swap rates.

The mortgage pain shows no sign of easing for borrowers who cannot yet lock into a new deal, particularly those on a five-year fixed who are not due to refinance until 2027. The Bank of England has estimated that 750,000 households with a fixed rate set to expire in 2026 are currently paying rates below 3%.

Springall also pointed out that in February 2022, sub-2% fixed mortgages were available, so moving off expiring deals will be a huge shock for borrowers.

What it means for letting agents and inventory clerks

Rising fixed mortgage costs put added pressure on landlords refinancing in the coming years. Letting agents should be aware that many landlords face significantly higher financing costs as older, cheaper deals expire, and factor this in when advising clients on rental portfolios and tenancy turnover.