Mortgage rates have increased for the first time month-on-month since February, signaling a shift in the housing market as conditions begin to "soften". According to the financial experts, the average two-year fixed mortgage rate rose slightly from 4.96 percent in September to 4.98 percent in October, while the five-year fixed rate climbed from 5.00 percent to 5.02 percent.
Experts suggest that this uptick reflects growing caution among lenders, particularly ahead of potential tax changes in the upcoming Autumn Budget. Moneyfacts data shows that mortgage rates only climbed very slightly over the month, by 0.02 percentage points. Moneyfacts said that "mixed moves" from lenders have led to a rise in the average shelf-life of mortgage products generally, to 22 days in October, from 17 days in September.
According to Moneyfacts, the average shelf-life of products has risen above 20 days for the first time since April 2025, when it reached 21 days.
Simon Gammon, managing partner at Knight Frank Finance, said: "Inflation has crept close to double the Bank of England's 2% target in recent months, and consumers' inflation expectations have started to rise.
"Both factors have unsettled policymakers and paused the steady decline in mortgage rates we've seen since early spring.
"Lenders have responded cautiously, with some edging rates higher and the overall average ticking up slightly.
"This is unlikely to mark the start of a sustained rise in borrowing costs, but rather a prolonged plateau while the outlook becomes clearer.
"The pause is likely to weigh on housing market activity, which was already showing signs of softening ahead of the November Budget amid speculation about potential changes to property and personal taxation."
Rachel Springall, a finance expert at Moneyfacts, said: "Borrowers may well be disappointed to see fixed mortgage rates on the rise. Volatile swap rates and a cautionary approach among lenders have led to an abrupt halt in consecutive monthly average rate falls."
She said that with sticky inflation, "any imminent base rate cuts by the Bank of England seem unlikely".
Ms Springall added: "It is not all doom and gloom for borrowers, as the mortgage market has shown how far it has improved over recent years.
"Borrowers who locked into a two-year fixed-rate deal back in October 2023 would have been paying 6.47% in interest on average, compared to 4.98% now.
"That is a difference of £225 per month in repayments on a £250,000 mortgage over 25 years."
