British mortgage rates hit 6 percent for first time in three years

The average five-year fixed mortgage rate in Britain has surged to 6% for the first time since September 2023. This milestone comes as the number of mortgage deals under 5% has plummeted by 99% since the start of September, leaving just nine such options available. The spike in rates is driven by rising wholesale funding costs and volatile swap rates, which have prompted lenders to withdraw cheaper mortgage products.

The average two-year fixed mortgage rate has also climbed to 5.98%, its highest level in over three years. As fixed-rate mortgages become more expensive, some borrowers are exploring alternative options like base rate tracker mortgages, which currently offer more stable variable rates.

The Bank of England has maintained the UK interest rates despite recent inflation hikes, adding pressure on homeowners. The sharp increase in mortgage rates underscores the financial challenges facing those looking to secure home loans amid economic uncertainty.