The average interest rate for a five-year fixed mortgage has reached 6%, marking the first occurrence of this level in three years. This increase has resulted in the disappearance of approximately 1,500 mortgage deals priced below 5% since early September, according to Moneyfacts.
The rise in rates is attributed to higher costs faced by lenders amid ongoing global economic uncertainty, particularly following the onset of the Iran war. The average rate for two-year fixed mortgages is currently at 5.98%.
Homebuyers should brace for tighter budgets as the 6% mortgage rate reshapes the market. Watch for potential shifts in buyer behavior, increased demand for rental properties, and how lenders adapt their offerings in response to these changing conditions.