Average fixed mortgage rates are rising despite cuts to the Bank of England base rate in 2024, according to analysis by Moneyfacts.
The average standard variable rate (SVR) has decreased to 7.78%, down from 8.17% a year ago.
Since February 2024, the average 2-year fixed rate has slightly fallen from 5.56% to 5.52%, while the average 5-year fixed rate has increased from 5.18% to 5.32%, reaching a six-month high of 5.38% in August 2024.
The average rate on a 10-year fixed mortgage has risen from 5.87% to 5.65% since February 2024.
Average rates across savings products have also changed – the average easy access savings rate has fallen from 3.17%, and the average easy access ISA rate has dropped from 3.30%.
The average notice account rate has decreased from 4.30%, and the average notice ISA rate has fallen from 4.16%.
Since January 2025, the average easy access savings rate has risen slightly from 2.90% to 2.92%, while the average easy access ISA rate has gone up from 3.05% to 3.06%.
The average notice rate is now at 4.00%, unchanged since the start of January 2025.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “Borrowers will be disappointed to see a rise to fixed mortgage rates over the past month, with the average five-year fixed rate hitting a six-month high.
“The recent volatility in swap rates has been a key driver to lenders reviewing their pricing.
“However, it does take a couple of weeks for lenders to catch up with a change in course, and swaps have been falling over recent days.
Springall added: “The Bank of England base rate dropped by 0.25% in November 2024 to 4.75%, so it would not be surprising to see borrowers frustrated that fixed mortgage rates are going up.
“This demonstrates how fixed mortgages have other influences at play, and a base rate cut does not necessarily result in a surge of lenders cutting rates to their fixed rate range.
She said: “Millions of borrowers are due to come off cheap fixed mortgages, so they will be waiting with bated breath for mortgage rates to fall.
“The incentive to switch away from a Standard Variable Rate (SVR) remains prevalent as a typical mortgage borrower being charged the current average SVR of 7.78% would be paying £355 more per month, compared to a typical two-year fixed rate.”
She added: “The future of interest rate pricing remains unpredictable, but sticky inflation and wider economic uncertainty could limit the Bank of England’s Monetary Policy Committee from making aggressive cuts this year.
“However, there will be plenty of reasons for lenders to entice new business during 2025, and the Government wants them to do more to boost growth in the economy, thus the debate on the loosening of lending rules.
“The stamp duty deadline at the end of March is fast approaching, so first-time buyers would be wise to seek advice to see if they can get their foot on the first rung of the property ladder amid a short supply of affordable housing.”
