Mortgage rates rise for first time in eight months: Should borrowers be worried?

There are also fewer deals to choose from compared to last month.

The recent, steady decline in fixed mortgage rates came to an abrupt end at the start of October, according to the latest Moneyfacts UK Mortgage Trends Treasury Report - much to the dismay of borrowers.

The average rate charged by a two-year fixed deal rose month-on-month for the first time since February 2025 from 4.96% to 4.98%, while the average five-year fixed mortgage rate similarly increased for the first time in eight months from 5.00% to 5.02%, the report revealed.

Why are mortgage rates rising?

Swap market volatility and ongoing economic uncertainty likely underpinned the change in direction by causing lenders to adopt a more cautious approach to their pricing.

“There may be little margin of rate movement from lenders in the coming weeks, prolonging the subdued sentiment,” Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, further warned.

With inflation expected to reach 4% before the year’s end (double the Bank of England’s 2% target), she explained that the UK’s central bank is unlikely to make any imminent cuts to the base rate that could help drive mortgage rates down. Even then, she added that the market might not respond to such a change if other factors remain at play.

Does this spell bad news for borrowers?

Nevertheless, Springall reassured borrowers that “it is not all doom and gloom”, as the mortgage market has come a long way in recent years.

For instance, those who locked into a typical two-year fixed deal in October 2023 (at 6.47%) could save £225 per month if they refinanced with a similar mortgage today^*.

They also have a larger number of products to choose from; although the amount of mortgage deals on the market dipped below 7,000 (to 6,998) between September and October, this far outweighs the 5,495 available two years ago.

What’s more, the average shelf-life of a mortgage deal rose above 20 days (to 22 days) for the first time in six months between September and October - a further sign of stability.

However, that’s not to say borrowers aren’t still facing obstacles.

“The repercussions of rising fixed rates and subdued sentiment stifle the Government’s push for lenders to do more to boost UK growth,” said Springall. While positive strides were made in introducing a permanent Mortgage Guarantee Scheme and relaxing loan-to-income (LTI) rules earlier this year, the combination of higher interest rates and lack of affordable housing may prove a challenge.