UK Mortgage Rates Edge Up Again: October 2025 Update

After about eight months of largely falling rates, UK mortgage pricing has started to creep higher again - a development borrowers should take note of.

Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

What’s happening with mortgage rates?

Recent data show that average fixed-rate mortgage pricing has risen for the first time since February this year: the average two-year fixed rate climbed from 4.96 % to 4.98 % month-on-month, and the average five-year fixed increased to 5.02 %. Moneyfactscompare+2Mortgage Soup+2
The upward movement follows a period where rates steadily declined due to expectations of easing from the Bank of England (BoE) and benign market conditions. Moneyfacts Group+1

Why are mortgage rates going up now?

1. Swap rates and market pricing

Fixed mortgage pricing is heavily influenced by long-term funding costs - such as interest rate swap markets. A recent data point shows the two-year GBP interest rate swap stood at approximately 3.96 % on 13 October 2025.
When swap rates rise, lenders face higher costs to secure long-term funding, and those costs tend to be passed into fixed mortgage pricing. Additionally, global uncertainty and elevated bond yields are feeding into swap and gilt markets.

2. Inflation remains sticky

Although headline inflation in the UK has eased from earlier peaks, broader inflation pressures are still proving persistent. The International Monetary Fund (IMF) recently warned that inflation risks remain entrenched and that the UK may see the highest inflation rate in the G7 during 2025.
This caution constrains the BoE’s ability to cut its base rate quickly, which feeds through into mortgage pricing. For example, BoE Monetary Policy Committee member Megan Greene stated she does not see a strong case for further quarterly rate cuts in the near term.

3. Funding and gilt yield pressures

UK government bond (gilt) yields remain elevated, reflecting both domestic fiscal concerns and global risk dynamics. Elevated gilt yields increase funding costs for lenders, and mortgage pricing has to reflect that. Financial Times+1

What this means for home-buyers, remortgagers and landlords

First-time buyers

If you’re buying your first home, the recent upward shift in rates means affordability margins may be tighter. With fixed‐rate products rising, having a solid deposit and demonstrating strong income/repayment capacity remain key. Some lenders may also become more cautious about high loan-to-value (LTV) lending or high income multiples. While specific figures are not available in all data sets, market commentary suggests tightening lending criteria is a possibility.

Existing homeowners / Remortgagers

If your current fixed deal ends soon (say within the next six to nine months), this rise in rates means your onward rate might be higher than you expected if you were waiting for further falls. Although exact monthly cost increases depend on loan size, term and LTV, even small changes in rate can have a noticeable effect on payment levels.
It may be prudent to speak to a qualified mortgage adviser earlier rather than later, and start looking at options up to six months before your current rate ends.

Buy-to-let landlords

Landlords remain exposed to funding cost movements and rental yield pressures. While some data suggest buy-to-let borrowing costs had been easing earlier this year, the broader upward pressure in rates means landlords should review their cost of finance and rental income assumptions.

Should you lock in now or wait?

Locking in now

One argument for fixing a rate now is to obtain certainty and avoid further increases if the market moves higher. Given swap rates and gilt yields are under pressure, taking a fixed deal may provide peace of mind. However, ensure the product offers flexibility should rates actually fall in the future.

Waiting for possible falls

On the other hand, if your current deal doesn’t end for 12-18 months and you believe rates will come down (as some analysts still hope), there may be value in waiting. That said, the recent upward move signals a shift in sentiment, and waiting carries risk of higher pricing.

Quick snapshot of key numbers

• Average 2-year fixed mortgage rate: ~4.98 % (October 2025)

• Average 5-year fixed mortgage rate: ~5.02 % (October 2025)

• Two-year interest rate swap: ~3.96 % (13 Oct 2025)

• Bank Rate: 4.00 % (most recent known official rate)

How Mortgage One Finance can help

At Mortgage One Finance, we work with in the region of 100 lenders and provide access to exclusive broker-only deals available through being part of the Quilter Financial Planning network. Our service offers expert advice tailored to your circumstances. We offer an initial free-of-charge consultation, followed by a full review should you wish to proceed (please refer to our terms of business for details). Whether you are buying, remortgaging or investing in buy-to-let, now may be an appropriate time to review your options. If you’d like to understand what today’s moves could mean for you, speak to a qualified mortgage adviser at Mortgage One Finance who can explain your options and timings based on your circumstances. (Information only — not advice.)

Conclusion

Mortgage rate-movements are signalling a change: after months of decline, we are now seeing fixed rates edge upward in October 2025. Rising swap rates, persistent inflation and elevated gilt yields are all feeding into higher borrowing costs. If your deal is nearing its end or you are planning to buy or invest soon, it’s a timely moment to explore the market rather than wait under the assumption of guaranteed rate falls. Acting early and being well-informed can help you make a confident decision.

FAQs

Q1: Why have mortgage rates started rising when the Bank Rate is unchanged?
A1: While the BoE base rate remains at 4.00 %, mortgage rates are significantly influenced by long-term funding costs (such as interest rate swaps and gilt yields) and lenders’ expectations of future inflation and policy. Those funding costs have picked up recently, pushing fixed-rate mortgages higher.

Q2: If I’m on a current fixed rate, do I need to remortgage now?
A2: Not necessarily. If you are midway through a fixed deal, you may have time. But if your fixed term is ending within the next six to nine months, it makes sense to start reviewing your options now — the market environment suggests pricing may not fall further quickly.

Q3: Are buy-to-let mortgage rates also going up?
A3: While buy-to-let rates had been easing earlier in the year, recent data show renewed upward pressure in the broader mortgage market, which means BTL borrowers should keep a close eye on their financing costs and rental yield assumptions.

Q4: Could mortgage rates fall again in 2026?
A4: It is possible. Many analysts still expect some easing of monetary policy and lower long-term yields later in 2026. However, there are no guarantees and the latest data show the market is more cautious than before — so waiting doesn’t come risk-free.

Q5: What should I ask a mortgage adviser?
A5: Ask about timing (when to fix), the range of products available (including lender policies on high LTVs or income multiples), flexibility (early repayment, portability), and the whole cost of switching (fees, early repayment charges). Also ask about how they are paid: at Mortgage One Finance we provide an initial free-of-charge consultation and subsequent remuneration details are clearly set out in our terms of business.