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Moneyfacts figures reported on 9 November show average UK two- and five-year fixed mortgage rates have risen to near 6% since the start of 2026. On a £250,000 mortgage, the increases amount to about £1,932 to £2,016 more per year, according to the report; energy-price and inflation pressures linked to the Middle East conflict have disrupted earlier expectations of rate cuts.
Average UK fixed mortgage rates have risen to almost 6% since the start of 2026, adding about £2,000 a year to repayments on a typical £250,000 mortgage, according to Moneyfacts figures reported by This Is Money on 9 November. The rise reverses earlier expectations that Bank of England rate cuts could bring fixed deals down, with the report linking the change to inflation and energy-price pressures following conflict in the Middle East.
Moneyfacts data puts the average two-year fixed rate at 5.96%, up from 4.83% at the beginning of the year. The average five-year rate climbed from 4.91% to 5.99%. On the report’s example of a £250,000 mortgage, the two-year deal costs an estimated £168 more each month, or £2,016 over a year. The equivalent increase for a five-year deal is £161 a month, or £1,932 a year.
The figures describe estimated costs for a typical loan, not the exact bill facing every borrower. Mortgage payments depend on factors including the amount borrowed, the remaining term, the deal and the borrower’s circumstances. Moneyfacts personal finance analyst Caitlyn Eastell said borrowers could face thousands of pounds more in annual payments than at the start of January.
The rate increases have coincided with pressure on the housing market. Lloyds Banking Group reported that average property prices fell 1.2% in the year to October 2026, the steepest annual decline since October 2023, attributing the move in part to high mortgage rates deterring buyers. That finding is a separate measure of the market and does not establish that mortgage rates alone caused the price fall.
Higher Rates Raise Household Bills
The change affects both existing borrowers whose fixed deals are ending and people seeking loans to buy homes. For a household refinancing a £250,000 mortgage, an increase of around £160 to £168 a month can put sustained pressure on a budget. The reported yearly totals show how a change in rates can translate into a large additional cost over the term of a deal.
Higher borrowing costs may also weigh on home buying by limiting what prospective buyers can afford to borrow. Lloyds’ reported annual house-price decline offers evidence of a weaker market, although the available figures do not show how much of the fall was caused by mortgage rates versus other factors. If rates remain elevated or rise further, affordability could continue to constrain buyers and borrowers coming off fixed deals.
The financial impact is not uniform. Borrowers with long-running fixed deals may not see an immediate payment change, while those taking a new loan could face rates different from the averages reported. The figures are a snapshot of average advertised or available rates, rather than a forecast of what every lender will charge or what any individual will pay.
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From Rate-Cut Hopes to Inflation
Before the Iran conflict began at the end of February, the report says markets and analysts expected the Bank of England to cut interest rates during 2026. Some forecasts suggested fixed mortgage deals might approach 3%. Those were expectations, not rates borrowers were guaranteed to receive. The report says disruption to oil supplies, particularly through the Strait of Hormuz, pushed energy prices higher and contributed to a renewed inflation threat.
The Bank of England raised its official rate from 3.75% to 4% the week before the report, its first increase since August 2023. Inflation had reached 3.5%, an 11-month high and above the Bank’s 2% target. Governor Andrew Bailey left open the possibility of another increase before Christmas, while market bets cited in the report suggested the rate could reach 4.5% or 4.75% by the end of 2027. Those market expectations may change and are not confirmed policy decisions.
The report also points to UK business costs, including higher employer National Insurance contributions and increases in the minimum wage, as possible contributors to prices as firms pass on costs. It attributes the mortgage squeeze broadly to both international energy and inflation pressures and domestic cost increases. The figures provided do not quantify how much of the rate rise came from each factor, so the headline’s attribution to Donald Trump’s war is the report’s framing rather than a measured breakdown of responsibility.
“The recent unrest has ripped up those forecasts.”
— Angela Kerr, director at the Homeowners Alliance
Rate Path and Borrower Costs
The figures do not establish how much of the rise in mortgage rates is attributable to the Middle East conflict, oil disruption, UK business costs or other market influences. Nor do they show the rate available to a particular borrower: lender, loan-to-value ratio, credit profile, fees and product terms can all affect an offer.
The Bank of England’s next decisions remain uncertain. Bailey left open a further increase before Christmas, and market bets pointed to possible rates of 4.5% or 4.75% by the end of next year, but neither is a confirmed outcome. It is also unclear whether inflation will exceed 6%, a risk cited in the report, or how quickly energy prices and mortgage rates may change.
Watch Inflation and Bank Decisions
The next signals for borrowers will include new inflation data, energy-market developments and the Bank of England’s upcoming rate decisions. Those indicators will help show whether the recent increase is followed by further tightening or whether pressure eases; the report does not provide a confirmed date or scale for any additional rate move.
Homeowners whose fixed-rate deals are due to expire and buyers seeking a mortgage will need to compare current offers against their own borrowing needs and circumstances. The source report advises people to explore options early, but the rates quoted here are averages and do not guarantee that a specific deal will be available. Borrowers should check fees, repayment terms and affordability before choosing a product.
Key Questions
How much have typical mortgage costs increased?
For the report’s example of a £250,000 mortgage, the average two-year fixed rate increase corresponds to about £168 more per month, or £2,016 a year. The five-year rate increase corresponds to about £161 more per month, or £1,932 a year. Actual payments depend on the loan and product.
What are the average fixed mortgage rates now?
Moneyfacts figures cited in the report put the average two-year fixed rate at 5.96% and the average five-year rate at 5.99%, as of the report updated on 9 November 2026.
Why have mortgage rates risen?
The report links the increase to higher inflation and energy prices following conflict in the Middle East, alongside domestic business-cost pressures. It does not quantify the contribution of each cause, and the exact drivers of an individual lender’s rate are not specified.
Will the Bank of England raise rates again?
That is not confirmed. Governor Andrew Bailey left open the possibility of another increase before Christmas, and market bets cited in the report suggested further rises could occur by the end of 2027. These are signals and expectations, not a decision or guarantee.
Source: thisismoney.co.uk
