Mortgage rates in the UK have risen above the 5% mark as lenders respond to growing market uncertainty by withdrawing hundreds of mortgage products. The latest figures show that the average two-year fixed mortgage rate has reached 5.01%, while the average five-year fixed rate has increased to 5.09%, the highest levels seen since the middle of 2025.
The rise in rates has been accompanied by a sharp reduction in available mortgage deals. Over the past 48 hours, around 472 residential mortgage products have been removed from the market. This represents roughly 6.5% of all available deals, reflecting a quick response from lenders to changing financial conditions.
Although the drop in mortgage options has been significant, it still falls short of the dramatic disruption seen during the market turbulence that followed the September 2022 UK mini‑Budget.
During that period, lenders removed an even larger number of products in a very short time. On 27 September 2022, a record 935 mortgage deals were withdrawn in a single day, representing more than a quarter of the entire mortgage market at the time.
Market Turbulence Returns
Industry experts say the current situation highlights renewed volatility within the mortgage market.
According to Adam French, head of consumer finance at Moneyfactscompare.co.uk, the past few days have been among the most unsettled since the events that followed the 2022 mini-Budget.
He explained that lenders have reacted quickly to the sharp rise in swap rates, which are a key factor used by banks and lenders to price fixed-rate mortgages. When swap rates increase rapidly, lenders often remove deals temporarily while they review and update their pricing.
Deals May Return Soon
Despite the sudden withdrawal of hundreds of mortgage products, French suggested that many of these deals could return to the market in the coming days or weeks. Lenders often reintroduce updated products once they have adjusted their interest rates to reflect new market expectations.
However, borrowers are already feeling the impact of rising rates. According to the latest data from Moneyfacts, the average two-year fixed mortgage rate has climbed to 5.01%, marking the first time it has exceeded the 5% threshold since August 2025.
At the same time, the average five-year fixed rate has also crossed the 5% line, rising to 5.09%.
Setback for Borrowers
The increase in borrowing costs represents disappointing news for many homebuyers and homeowners who had been hoping mortgage rates would continue to fall during 2026.
For much of the past year, expectations had centred on the possibility of gradually declining mortgage rates as inflation pressures eased. However, recent developments in financial markets have quickly changed that outlook.
Global Factors Influencing Rates
Analysts say the direction of mortgage rates in the coming months will depend heavily on wider global economic conditions. In particular, financial markets are closely watching inflation trends and geopolitical developments.
French noted that uncertainty linked to global events, including ongoing tensions in the Middle East, is affecting market expectations around inflation and interest rates. These factors can influence government bond yields and swap rates, which in turn shape mortgage pricing.
What Borrowers Should Expect
For borrowers currently searching for a mortgage, the latest changes highlight how quickly the lending landscape can shift. The removal of deals and rising rates may lead some buyers to reassess their options or secure a mortgage sooner to avoid further increases.
While many lenders are expected to return with revised products once pricing stabilises, the short-term outlook suggests that mortgage rates could remain above the 5% level for the time being.
As the market continues to respond to economic uncertainty, both lenders and borrowers are likely to face further adjustments in the weeks ahead.
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