Path of mortgage rates uncertain as swap rates rise: Moneyfacts

Over the past few weeks, swap rates have been on the rise, and as a result, lenders are starting to become more cautious with their rate pricing, with some increasing rates over the past few days, such as Nationwide, Santander and Barclays.

Average mortgage rates across two, five and 10-year fixed terms have fallen year-on-year to 4.85%, 4.94% and 5.60% respectively.

However, since the Bank of England reduced Bank Rate to 3.75% in December, the 0.25% cut has not been mirrored by average mortgage rates. The average standard variable rate (SVR) has fallen by 0.10%, from 7.25% to 7.15% since the start of December 2025. Since the start of February 2025 up to the start of this month, 1% has been shaved off BBR, but only 0.63% has dropped off the average SVR. 

The Moneyfacts Average Mortgage Rate has fallen over the last 12 months to 4.90%. The rate has been below 5% since the start of November 2025.

Rachel Springall, finance expert at Moneyfactscompare, said: “Borrowers looking to refinance will be encouraged to see fixed rates drop over recent months, but wider market uncertainty is starting to impact mortgage rate setting. Swap rates have been on the rise over recent weeks, which can lead to a pause in any substantial cuts by lenders. Some lenders may even increase rates, such as those who priced a bit too low last month, so now is a great time for borrowers to secure a low-rate deal if they need to refinance. Remortgage customers stand to benefit the most from refinancing this year, coming off the average standard variable rate (SVR), they could save around £350 per month on their mortgage repayments, which is around £4,200 over 12 months.

“The bad news this year will come to those who are coming off a cheap fixed rate mortgage from five years ago. Borrowers will find the average rate on a five-year fixed mortgage is more than 2% higher than back in February 2021, when BBR was just 0.10%, so such cheap mortgages could not be sustainable. The mortgage market needs stability and innovation to support borrowers, such as modernising regulation, one of the key themes to be reviewed by the Financial Conduct Authority, laid out in its ‘Roadmap’ for the mortgage market.”