The average five-year mortgage fix has reached 6%, the highest rate since September 2023, Moneyfacts has revealed.

The latest data revealed that the number of sub-5% fixed mortgage deals in the UK has dropped by 99% in September, from 1,494 deals at the start of the month to just nine yesterday. This figure excludes deals that are exclusive to Northern Ireland lending only.

The increase follows the continued conflict in the Middle East, which has led to increased energy and oil prices, rising interest rates and higher government borrowing costs.

Moneyfacts stated that while the number of sub-5% fixes has reduced significantly, the number of sub-5% variable rate mortgages has remained "broadly stable", falling from 411 at the start of September to 389.

The average two-year fixed rate has risen to 5.98%, which is the highest rate since mid-December 2023.

The financial product price comparison firm said that the biggest high street lenders had made repeated fixed rate increases during September, with Barclays increased selected fixed rates on four occasions. HSBC, Lloyds Bank, Nationwide, NatWest, Santander and TSB each made three rounds of increases.

Finance expert at Moneyfacts, Rachel Springall, stated: "The past few weeks have seen pricing margins among major lenders come under immediate pressure from renewed swap rate volatility. As wholesale funding costs climb on the back of rising gilt yields, fixed rate adjustments are somewhat inevitable.

"Average fixed mortgage rates rising back to three-year highs will be disastrous news for borrowers.

"Lenders look at their margins very carefully, so it would be unwise for them to price deals too low when swap rates and wholesale funding costs are elevated. Those coming to the end of a fixed deal would be wise to seek advice and compare deals carefully, particularly as borrowers could secure a new deal a few months before their existing mortgage ends. However, this varies among lenders, some may be three months, others could allow six months for a product transfer, so not everyone will be able to lock into a new deal right now."

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