Lenders have increased the prices of their mortgages throughout September, as the Middle East conflict kept inflation high, despite the Bank holding base rates steady.
Nick Mendes, of broker John Charcol, said increases in swap rates – the interest rates that banks charge each other for borrowing – since February had forced lenders to withdraw their sub-5pc rates across most loan-to-value bands.
He urged buyers who could access sub-5pc mortgages to act quickly, given that “further repricing looks likely”.
Mr Mendes said: “Markets are now pricing more than a full percentage point of increases over the next 15 months.
“The Governor [of the Bank] has warned that waiting for full evidence of second-round effects from the energy shock risks acting too late, and several major banks expect a rise as early as November.
“If that view firms up, swap rates could move higher again, and the remaining sub-5pc deals would be among the first to go.”
On Tuesday, the average two-year fix hit 5.93pc, the highest rate since July 2024, while five-year rates reached 5.94pc, their highest since October 2023.
It means the average monthly payment on a £250,000 loan over 25 years has risen by an extra £52 a month for a two-year term, and around £47 for a five-year term, according to data from Moneyfacts.
