Some average mortgage rates ‘jump month-on-month for first time since February’

Average two and five-year fixed mortgage rates have jumped month-on-month for the first time since February, according to a financial information website.

Moneyfacts recorded average mortgage rates on the market at the start of each month – and found that, across all deposit sizes, the average two-year fixed-rate mortgage increased from 4.96% in September to 4.98% in October.

The average five-year fixed rate increased from 5.00% in September to 5.02% in October.

Moneyfacts said that “mixed moves” from lenders have led to a rise in the average shelf-life of mortgage products generally, to 22 days in October, from 17 days in September.

This is the first time the average shelf-life has moved above 20 days since April 2025, when it was 21 days, Moneyfacts said.

Rachel Springall, a finance expert at Moneyfacts, said: “Borrowers may well be disappointed to see fixed mortgage rates on the rise.

“Volatile swap rates and a cautionary approach among lenders have led to an abrupt halt in consecutive monthly average rate falls.”

She said that with sticky inflation, “any imminent base rate cuts by the Bank of England seem unlikely”.

Ms Springall added: “It is not all doom and gloom for borrowers, as the mortgage market has shown how far it has improved over recent years.

“Borrowers who locked into a two-year fixed-rate deal back in October 2023 would have been paying 6.47% in interest on average, compared to 4.98% now.

“That is a difference of £225 per month in repayments on a £250,000 mortgage over 25 years.”

Simon Gammon, managing partner at Knight Frank Finance, said: “Inflation has crept close to double the Bank of England’s 2% target in recent months, and consumers’ inflation expectations have started to rise.

“Both factors have unsettled policymakers and paused the steady decline in mortgage rates we’ve seen since early spring.

“Lenders have responded cautiously, with some edging rates higher and the overall average ticking up slightly.

“This is unlikely to mark the start of a sustained rise in borrowing costs, but rather a prolonged plateau while the outlook becomes clearer.

“The pause is likely to weigh on housing market activity, which was already showing signs of softening ahead of the November Budget amid speculation about potential changes to property and personal taxation.”

On Monday, housebuilders Barratt Redrow and Persimmon unveiled a new 5% deposit scheme, supported by Barclays and TSB.

Under the Rezide scheme, home buyers will need to provide a 5% deposit, while a Rezide equity loan will cover 15% of the property’s market value, up to a maximum loan amount of £100,000.

The remaining 80% of the purchase price will be financed through a mortgage from Barclays or TSB. Various terms and conditions will apply.

The product will initially be available only to buyers of Barratt Redrow and Persimmon homes, with the scheme being rolled out across England, those behind the initiative said.

They added that the scheme has been designed to support both first-time buyers entering the property market, as well as those seeking to move into new-build homes.