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

Rising Mortgage Rates Pose Risks for Borrowers Delaying Fixed Deals

Mortgage rates in the UK have increased in recent months, with the average new mortgage rate reaching 5.59% on 29 July 2026, up from 4.9% in March. Borrowers who delay securing a fixed-rate mortgage may face higher costs as rates continue to climb.

The average two-year fixed mortgage rate rose from 4.84% in March to 5.68% in June, before edging down slightly to 5.62% by the end of July. Five-year fixed rates followed a similar trend, increasing from 4.96% in March to 5.66% at the end of July. These rates remain significantly higher than those seen before interest rates began rising, with two-year fixes up from 2.55% in July 2021 and five-year fixes more than doubling from 2.78% to 5.66%.

Standard variable rates (SVRs) have held steady at 7.13% since March, leaving borrowers on reversion rates paying around 1.5 percentage points more than those on new fixed-rate deals. Longer-term fixes, such as 10-year products, remain the most expensive, with the average 10-year fixed rate at 6.21% by late July.

For buyers with small deposits, the outlook is particularly challenging. The average five-year fixed mortgage rate at 95% loan to value (LTV) recently rose above 6%, reaching 6.07%. First-time buyers able to save a 10% deposit may access a wider range of cheaper mortgage rates and could save roughly £600 per year compared to those with a 5% deposit. However, high house prices and affordability pressures continue to make saving even a 5% deposit difficult for many.

A growing number of lenders have introduced products aimed at helping first-time buyers, including 98% mortgages and options for £5,000 deposits. Borrowers are advised to seek guidance from brokers to navigate the current mortgage market and understand lending criteria.

For letting agents and inventory clerks, these trends may impact tenant demand, landlord mortgage costs, and the overall rental market as more buyers face affordability challenges.