Fixed mortgage rates in the UK have climbed to a three-year high, with the average two-year fixed deal now costing 5.97%, according to figures from Moneyfacts.

The average two-year fixed rate rose from 5.59% at the start of September to 5.97% at the beginning of November, while the average five-year fixed rate jumped from 5.63% to 6.00% over the same period. Together, the rises pushed the Moneyfacts Average New Mortgage Rate to 5.89%, its highest level since November 2023, when it reached 6.07%.

Lenders repriced aggressively in the weeks before the Bank of England raised Bank Rate from 3.75% to 4% on 5 November, its first increase in more than three years. The lowest two-year fixed rates from Barclays, HSBC, Lloyds Bank, NatWest and Santander are now on average 0.44 percentage points higher than they were at the start of September. Much of the turbulence came from volatility in swap rates, which lenders use to price fixed deals, rather than from Bank Rate itself.

What it costs borrowers

The average two-year fixed rate has risen by 1.14 percentage points since January, when it stood at 4.83%, adding about £169 a month — or £2,028 a year — to repayments on a typical £250,000 mortgage over 25 years. A further quarter-point rise in mortgage rates would add roughly £37 a month, or £444 a year, to the same loan.

About 2.3 million fixed mortgage deals are set to expire by the end of 2027, according to UK Finance, and borrowers who fall onto a lender's standard variable rate — currently 7.13% on average — would pay about £182 a month more than on a typical two-year fixed deal.

Rachel Springall, finance expert at Moneyfactscompare.co.uk, said lenders "could well pivot away from making aggressive rises over the coming weeks" and some might even make small cuts before the year is over if they have overcompensated for swap market volatility. But she warned that with conflicts in the Middle East and between Russia and Ukraine "on a knife-edge", prolonged pressure on global inflation could worsen the outlook for UK interest rates. Economists currently expect the Bank of England to raise Bank Rate by another quarter point by February.