Borrowers are in limbo once again, yet any hold to the Bank of England Base Rate (BBR) must not deter them from seeking a deal, according to analysis from Moneyfacts.
The biggest high street banks have all moved to cut selected fixed rates over the past two weeks, which includes Barclays, HSBC, Lloyds Bank, NatWest and Santander, all catching up to swap rate movements. Whether further cuts continue is up for debate, according to Moneyfacts.
Market expectations for interest rates to be higher for longer drove lenders towards hiking mortgage rates. The Moneyfacts Average Mortgage Rate noted its biggest monthly rise since July 2023. During the summer of 2023, the mortgage market felt a huge shock, when markets priced in higher rates for longer, due to stubbornly high inflation.
Year-on-year, average mortgage rates across the two-, five- and 10-year fixed sector have all risen. As of the start of April, the average 10-year fixed breached 6% for the first time since July 2024. The average two-year fixed rate reached its highest point since July 2024, and the five-year equivalent rose to its highest point since November 2023.
The Bank of England Base Rate was cut to 3.75% in December 2025, since then, the average standard variable rate (SVR) has fallen by 0.14%, from 7.27% to 7.13%. Year-on-year, BBR has fallen by 0.75%, but the average SVR has fallen by just 0.47%.
Moneyfacts finance expert Rachel Springall commented:
“Borrowers have been left in limbo as it is difficult to know whether they should rush to lock into a fixed deal or wait and see if lenders make more sizeable cuts. Unfortunately, the outlook on interest rates remains uncertain, so mortgage holders coming off a cheap fixed rate will have to cover higher repayments this year, which will be incredibly frustrating. It is still worth moving off an expensive revert rate, as borrowers could save almost £2,500 a year moving onto a fixed rate deal.”
She added: “The Bank of England refuses to rush any decisions, and with fears of a recession already creeping in, it looks like stagflation has thrown out any plans for cuts this year. Economists expect the BOE base rate to hold in the short-term, and it’s looking increasingly unlikely we will see a cut until 2027.
“However, borrowers will hope that the mortgage mayhem experienced over recent weeks will calm, but repricing could go both ways amid swap rate moves. Mortgage rate hikes have been driven by the conflict in the Middle East, where the disruption of supply chains has created muddied waters for the future path of inflation and interest rate setting.”
