Home loan fixed-rate prices edged higher this week despite the Bank of England cutting the base rate this month, data from Moneyfacts shows.  

The average mortgage rate has risen by a single basis point to 5.01%, says the data group. 

Within this, average two-year fixes rose by 2bps to 4.98% today from 26 August. 

Average five-year fixes also rose by 2bps to 5.01% over the same period. 

This comes after the Bank cut the base rate by a quarter point to 4% from earlier this month, taking the interest rate to its lowest level since March 2023. It is also the third cut this year and the fifth since last August. 

However, two-year swap rates have subsequently climbed from 3.655% to 3.752% and five-year swap rates have climbed from 3.707% to 3.827%. 

The data body points out that so far this week, a number of lenders have lifted rates —  NatWest, Royal Bank of Scotland and NatWest Intermediaries Solutions have raised prices by 20bps, Santander by 11bps, Gen H by 15bps, Vernon Building Society by 15bps and Hodge by 20bps. 

Moneyfacts head of news Adam French says: “The Bank of England’s Monetary Policy Committee meet eight times a year to set the base rate, however, an estimated half a million changes to the swap rate take place over the same period.  

“This market is valued at £350trn, and rates can change every second – sometimes multiple times per second. And it is this market that heavily influences how banks and building societies price their fixed-rate mortgage products.  

French adds: “What influences swap rates can be quite broad. For example, the two-year swap rate fell from 4.00% to 3.78% in response to the economic shock of [US] President [Donald] Trump’s ‘liberation day’ tariffs, and the average two-year fixed rate mortgage followed, dropping from 5.33% to 5.29% within days.  

“Whereas swap rates rose in response to the latest base rate cut as inflation forecasts increased. It’s this volatility that means mortgage rates can rise even after the base rate falls. 

“Looking to the end of the year, borrowers can still expect mortgage costs to continue slowly sliding, but there may be occasional blips as wider economic data has an ever-greater effect on the rates lenders set.”