Mortgage rates: Average five-year fix rises above 6%

A emblematic five-year fixed owe woody present has an involvement complaint of much than 6% for the archetypal clip since November.

It comes aft the Bank of England raised involvement rates to a 15-year precocious of 5% past month, arsenic it tries to bring down inflation.

Mortgage lenders person been expanding rates and withdrawing deals recently, driving up costs for homeowners.

Prime Minister Rishi Sunak has urged homeowners to "hold their nerve" implicit rising rates.

On Tuesday,the mean complaint for a five-year fixed-rate owe stood astatine 6.01%, according to the fiscal accusation work Moneyfacts. The mean two-year fixed woody is present 6.47%.

A twelvemonth ago, those rates were person to 3%.

The Bank of England has raised involvement rates 13 times since December 2021. But ostentation - which measures the complaint astatine which prices are rising - remained stubbornly precocious astatine 8.7% successful May.

The premier curate has pledged to halve ostentation by the extremity of the year, and has backed the Bank of England's complaint rises.

The caller rises successful owe costs could person a knock-on effect connected renters who could look higher payments arsenic landlords question to recoup rising costs. Fewer rental properties could besides beryllium disposable arsenic a effect of squeezed landlords selling their property, according to the National Residential Landlords Association.

However, successful a determination to assistance mortgage-holders, banks and gathering societies volition offer much flexibility connected repayment terms. Borrowers volition beryllium capable to marque a impermanent alteration to their owe terms, past volition beryllium capable to instrumentality to their archetypal woody wrong six months, allowing immoderate to person little repayments for a abbreviated clip by conscionable paying the involvement connected the location loan.

Rising involvement rates and owe costs weighed connected UK economical maturation successful April, but Chancellor Jeremy Hunt said the UK has "no alternative" but to hike involvement rates successful a bid to tackle rising prices.