According to Moneyfacts, the average two-year fixed rate rose from 4.83% at the start of March to 5.84% as of 1 April. It is also at its highest since July 2024.
Meanwhile, the typical five-year fixed rate has soared to the highest level since November 2023, rising from 4.95% to 5.75%.
While the average cost of a two-year fix has not moved since the previous working day, the five-year fix is 0.1% lower.
Options have improved for borrowers, however, and as of 1 April, there are also more mortgages on the market, at a product count of 6,201 residential deals, up from 6,190 the previous working day.
On the buy-to-let (BTL) side, the average two-year fixed rate rose from 5.43% to 5.44% in a day, while the typical five-year fixed rate stayed unchanged at 5.75%. There are more BTL deals, with the product count rising from 4,494 to 4,758 since the last working day.
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The average two-year tracker rate has remained at 4.69% and the average standard variable rate (SVR) is currently 7.13%.
Caitlyn Eastell, personal finance analyst at Moneyfacts, said: “It has been just over a month since the start of the Middle East conflict, and the impact on borrowers has been almost immediate as borrowing costs sharply rose, with almost all average rates across different LTV bands rising by a full percentage point or more.
“Even the lowest rates have taken a hit, in just a few weeks even the lowest rates available have risen from 3.51% to 4.60%, which adds around £150 a month or over £1,810 a year onto a typical £250,000 loan over 25 years.”
Eastell added: “Since the beginning of the conflict, almost £1,800 a year has been added onto the average two-year fixed rate – that’s over £3,500 for the full term, based on the typical £250,000 loan over 25 years. For the average five-year fix, over £1,400 a year has been added, which is over £7,000 for the full five years.
“However, some of the withdrawals seen in the first few weeks of the conflict are slowly starting to trickle back, but lenders may still be cautious as the future around inflation and interest rates is uncertain. Borrowers that are concerned about rising costs should get advice about seeking the best deal for them, and it may be reassuring that for those refinancing this year have the choice of locking into a new deal up to six months in advance.”
