The average 2-year residential mortgage rate has risen to 5.35%, up from 4.83% at the start of March.
This is the highest average rate since March 2025, Moneyfacts data shows, which would add an extra £900 per year to the cost of borrowing £250,000 over 25 years.
Adam French, head of consumer finance at Moneyfacts, said: “Swap rates, which underpin mortgage pricing, have risen sharply following the decision to hold the base rate at 3.75%, with markets interpreting commentary from the Bank of England as leaving the door open to rate rises amid ‘Trumpflation’ fears.
“With two- and five-year swaps now sitting at their highest level in more than a year, lenders are once again facing higher funding costs, and this will feed through into mortgage pricing.
“Moneyfacts analysis of more than 30 years of historic rates data shows mortgage rates have historically averaged around 1.5 percentage points above Base Rate.
“If markets continue to price in one or two rate rises, this could see average new mortgage rates stabilise at around 5.50% to 5.75%.”
Two- and five-year swaps are now around 1 percentage point higher than at the start of the conflict and at their highest level in more than a year (January 2025) – to now sit around 4-4.25%.
If average rates reached 5.50-5.75% that would leave borrowers paying £1,000 to £1,500 more per year on a typical £250,000 mortgage compared to just a few weeks ago.
