Fixed Mortgage Rates See Largest Monthly Increase in Over a Year

The average five-year fixed mortgage rate rose to 5.28% in December, driven by economic volatility following the UK Budget and global market shifts.

The average five-year fixed mortgage rate increased by 0.19 percentage points in December, reaching 5.28%, the highest monthly rise since August 2023.
Two-year fixed mortgage rates also climbed, rising by 0.13 percentage points to 5.52% at the start of December.
Experts attribute the rise to market volatility following the UK Chancellor’s Budget, which has raised concerns about persistent inflation and future borrowing costs.
Despite two Bank of England base rate cuts this year, lenders have not significantly reduced fixed mortgage rates due to economic uncertainties and volatile swap rates.
First-time buyers face challenges with affordability, though the number of high loan-to-value mortgage deals has reached its highest level in over two years.