Average five-year fix at highest level since 2023: Moneyfacts – Mortgage Strategy

The average two-year fixed jumped by 17 basis points and the five-year rate by 16bps over the past week as a wave of lenders hiked prices.

Moneyfacts’ weekly rate watch data showed substantial movements following repricing by major banks and building societies.

The average five-year rate reached 5.88%, the highest it has been since October 2023, when it hit the same level in the aftermath of the Liz Truss mini-Budget.

Meanwhile, the average two-year rate hit 5.84%, the highest it has been since April 21.

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 at the same LTV rose from 6.07% to 6.25%.

Moneyfacts finance expert Rachel Springall says: “A wave of mortgage rate hikes swept across the market this week, with fixed rate increases firmly dominating lender repricing.

“The major banks all moved to increased fixed rate mortgages this week, 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 also increased selected fixed rates by up to 30bps. Barclays also increased rates, by up to 20bps.”

“Swap rates remain near 30-day highs, so there is still some uncertainty around the future direction of fixed mortgage pricing.

“More hikes could be coming if lenders have not yet caught up to higher swap rates.”

Springall adds: “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 fixed who are not due to refinance until 2027.

“The Bank of England estimated 750,000 households with a fixed rate set to expire in 2026 are currently paying rates below 3%.”

And Springall points out that back in February 2022, there were sub-2% fixed mortgages available, so moving off expiring deals “will be a huge shock for borrowers”.

Fixed rate moves breakdown

• Accord Mortgages – Fixed rate mortgages increased by up to 40bps. Withdrawals: two ‘Cascade’ fixed rate mortgages withdrawn.
• Aldermore – Fixed rate mortgages increased by up to 55bps.
• April Mortgages – Fixed rate mortgages increased by up to 35bps.
• Atom Bank – ‘Prime’ fixed rate mortgages increased by 15bps on 16 September, followed by fixed rate mortgages increasing by 35bps on 18 September.
• Bank of Ireland Intermediaries – Fixed rate mortgages increased by up to 21bps, JBSP fixed rates by up to 17bps and ‘Bespoke’ fixed rates by up to 35bps.
• Bank of Ireland UK – Fixed rate mortgages increased by up to 17bps.
• Barclays Mortgage – Selected fixed rate mortgages increased by 20bps.
• Cambridge Building Society – Withdrawals: two fixed rate mortgages and the ‘First Step’ fixed rate withdrawn.
• Coventry Building Society – Fixed rate mortgages increased by up to 25bps. Withdrawals: selected first-time buyer and ‘Interest Only’ fixed rate mortgages withdrawn.
• Dudley Building Society – Selected fixed rate mortgages increased by up to 60bps.
• first direct – Selected fixed rate mortgages increased by up to 26bps.
• Foundation – Withdrawals: selected ‘F1’ and ‘F2’ fixed rate mortgages withdrawn.
• Gen H – Fixed rate mortgages increased by up to 20bps.
• Halifax – Fixed rate mortgages increased by up to 30bps.
• HSBC – Fixed rate mortgages increased by up to 37bps.
• Kensington – Selected fixed rate mortgages increased by 20bps. Withdrawals: ‘Core’ and ‘Select’ fixed rate mortgages with a 1% fee withdrawn.
• Leeds Building Society – Selected fixed rate mortgages increased by up to 21bps. Withdrawals: 5.01% fixed rate and 5.09% ‘Reach’ fixed rate withdrawn.
• Leek Building Society – Fixed rate mortgages increased by 20bps.
• Lloyds Bank – Fixed rate mortgages increased by up to 30bps, excluding the ‘Low Deposit’ fixed rate.
• Mansfield Building Society – Withdrawals: fixed rate mortgages withdrawn.
• Melton Building Society – Selected fixed rate mortgages increased by up to 10bps.
• Nationwide Building Society – Selected fixed rate mortgages increased by up to 30bps.
• NatWest – Fixed rate mortgages increased by up to 43bps.
• NatWest Intermediary Solutions – Fixed rate mortgages increased by up to 43bps.
• Newbury Building Society – Withdrawals: selected fixed rate mortgages withdrawn.
• Newcastle Building Society – Fixed rate mortgages increased by up to 65bps, including its ‘New Build’ fixed rate. Withdrawals: selected fixed rate mortgages withdrawn.
• Pepper Money – Fixed rate mortgages increased by 20bps.
• Principality Building Society – Selected fixed rate mortgages increased by up to 40bps.
• Royal Bank of Scotland – Fixed rate mortgages increased by up to 43bps.
• Saffron Building Society – Withdrawals: selected ‘Self-Employed’, ‘Contractor’, ‘Core’, ‘Professional LTI’, ‘JBSP’ and ‘Premier Income’ fixed rate mortgages withdrawn.
• Santander – Selected fixed rate mortgages increased by up to 15bps on 14 September, followed by fixed rate mortgage increases of up to 45bps on 16 September.
• Scottish Building Society – Selected fixed rate mortgages increased by up to 35bps.
• Skipton Building Society – Fixed rate mortgages increased by up to 37bps.
• Tipton & Coseley Building Society – Withdrawals: two fixed rate mortgages withdrawn.
• TSB – Fixed rate mortgages increased by 10bps on 15 September, followed by increases of up to 25bps on 17 September.
• Vernon Building Society – Selected fixed rate mortgages increased by 20bps.
• Vida Homeloans – Fixed rate mortgages increased by up to 35bps.
• Virgin Money – Fixed rate mortgages increased by up to 18bps for house purchase and up to 21bps for remortgage.
• West Brom Building Society – Selected fixed rate mortgages increased by up to 45bps. Withdrawals: seven fixed rate mortgages withdrawn on 16 September.
• West One – Two-year fixed rate mortgages increased by 55bps and five-year fixed rate mortgages increased by 65bps.
• Yorkshire Building Society – Fixed rate mortgages increased by up to 42bps.

Variable tracker and discounted variable rate moves

• Accord Mortgages – Selected variable tracker rates increased by 15bps.
• Dudley Building Society – Discounted variable rate increased by 40bps.
• HSBC – Variable tracker rates increased by 10bps.
• Santander – Variable tracker rates increased by 20bps.
• The Stafford Building Society – Range withdrawn and replaced with variable tracker rates for term starting from 5.19%.