October has begun with another challenging week for the UK mortgage market.
Average fixed mortgage rates have moved higher again, some major lenders have made significant pricing changes and new Bank of England figures show fewer buyers securing mortgages for house purchases.
At the same time, the property market is becoming increasingly favourable for buyers in some parts of the country – particularly London – as higher mortgage costs reduce demand and sellers compete for a smaller pool of purchasers.
So, are mortgage rates still rising? Is the housing market slowing down? And what should you do if you’re buying or remortgaging?
Here’s what changed in the UK mortgage market over the past week.
Quick Answer: What’s Happening to UK Mortgage Rates?
UK mortgage rates increased again during the first week of October 2026.
Rightmove’s mortgage tracker, updated on 3 October, shows average rates rising across every major loan-to-value band for homebuyers.
The average two-year fixed rate increased to 5.56%, while the average five-year fixed rate reached 5.52%.
Borrowers with smaller deposits continue to face higher average rates, with the average two-year fix at 95% LTV now above 6%.
The latest increases come alongside further lender repricing and weaker mortgage approval figures, suggesting higher borrowing costs are beginning to have a more noticeable effect on buyer activity.
What Are the Latest UK Mortgage Rates?
Rightmove’s latest figures show that mortgage rates continued moving upwards between the 26th of September and the 3rd of October.
| Mortgage Type | 26th of September | 3rd of October | % Change |
|---|---|---|---|
| Average 2-year fixed | 5.49% | 5.56% | +0.07% |
| Average 5-year fixed | 5.47% | 5.52% | +0.05% |
| 90% LTV, 2-year fixed | 5.60% | 5.68% | +0.08% |
| 90% LTV, 5-year fixed | 5.56% | 5.63% | +0.07% |
| 95% LTV, 2-year fixed | 6.01% | 6.06% | +0.05% |
| 95% LTV, 5-year fixed | 5.97% | 6.02% | +0.05% |
Source: Rightmove/Podium, updated 3 October 2026. These are market averages rather than individual mortgage quotations.
One of the interesting features of the latest figures is that rate increases aren’t confined to buyers with small deposits.
The average two-year rate at 60% LTV increased from 5.07% to 5.15%, while at 90% LTV it rose from 5.60% to 5.68%.
This reinforces something we’ve highlighted in recent market updates: having a larger deposit can provide access to different products and lower LTV bands, but it doesn’t make borrowers immune from wider changes in mortgage pricing.
Why Are UK Mortgage Rates Rising?
Mortgage rates aren’t determined by Bank Rate alone.
Fixed mortgage pricing is influenced by lenders’ funding costs, financial-market expectations, swap rates, inflation expectations and competition between lenders.
That distinction is particularly important at the moment.
The Bank of England held Bank Rate at 3.75% in September, but fixed mortgage rates have continued to increase.
For borrowers, the practical lesson is simple:
A Bank Rate hold does not automatically mean mortgage rates will stay the same or fall.
Lenders can reprice their products before the Bank of England makes another decision if their funding costs or expectations about future interest rates change.
Barclays Raises Some Mortgage Rates Twice in One Week
One of the most significant lender developments this week came from Barclays.
The lender increased rates across 85 products by as much as 0.30 percentage points early in the week before announcing another round of increases affecting 62 products.
Some mortgages were repriced twice.
For example, a two-year fixed purchase mortgage at 60% LTV with an £899 fee increased from 4.75% to 5.15% over the course of the week – a cumulative increase of 0.40 percentage points.
Selected large-loan products also increased, including a five-year fixed purchase and remortgage product at 75% LTV, which moved from 5.10% to 5.45%.
This is particularly relevant for borrowers looking at larger mortgages, including many buyers in London.
It also demonstrates how quickly the mortgage available when you first start looking at properties can change by the time you’re ready to submit an application.
Mortgage Approvals Fall to Their Lowest Level Since 2023
Perhaps the most important new information this week came from the Bank of England.
Its latest Money and Credit statistics show that mortgage approvals for house purchases fell to 54,900 in August, down from 55,900 in July.
That was below the previous six-month average of approximately 60,100 and the lowest monthly level since December 2023.
Approvals for remortgaging with a different lender also decreased, from 34,600 in July to 34,000 in August.
At the same time, the effective interest rate actually paid on newly drawn mortgages increased from 4.45% to 4.60%.
Net mortgage borrowing did increase from £4.1 billion to £4.4 billion, although this remained below the previous six-month average of £5.2 billion.
Taken together, these figures suggest that higher borrowing costs are increasingly affecting activity in the mortgage market.
Are Higher Mortgage Rates Affecting the Property Market?
There are growing signs that they are.
Zoopla’s September House Price Index estimates that a typical new mortgage rate has increased from around 4% at the beginning of 2026 to 5.2% in September.
For its representative buyer, that translates into approximately £150 more per month (or £1,800 a year) in mortgage repayments.
Meanwhile:
- The number of homes available for sale is 5% higher than a year ago.
- Sales agreed are 9% lower.
- UK annual house price growth has slowed to 0.8%.
- Buyers are becoming increasingly selective.
For people hoping to move home, higher mortgage rates are therefore having two competing effects.
Borrowing is more expensive, but buyers may have more properties to choose from and potentially greater negotiating power.
UK House Price Growth Halves in September
Nationwide’s latest House Price Index provides further evidence of a cooling property market.
UK house prices fell 0.2% month-on-month in September, after seasonal adjustment.
Annual house price growth slowed from 1.6% in August to 0.8% in September, its weakest rate since December 2025.
The average UK property price in Nationwide’s index stood at £274,251, compared with £275,465 in August.
This doesn’t mean property prices are falling sharply across the country.
Different regions and property types are performing very differently, and individual local markets can behave quite differently from the national average.
However, it does suggest that higher mortgage costs are beginning to limit how much buyers can, or are willing to pay.
What Is Happening to the London Property Market?
For London buyers, this week’s data is particularly interesting.
Zoopla reports that only around three in ten London homes are finding a buyer within three months, compared with approximately three-quarters of homes in Scotland.
It also reports that a quarter of properties newly listed during September had previously been on the market during the past year. Of those relisted properties, six in ten returned with a lower asking price.
That suggests negotiating conditions may be improving for some London buyers.
This doesn’t mean every seller will accept a substantial discount, and desirable properties can still attract strong competition.
But someone who has their mortgage position understood, deposit available and finances prepared may be in a stronger position to negotiate than they would be in a rapidly rising market.
Oportfolio Insight: Higher Mortgage Rates Don’t Necessarily Mean Buyers Should Stop Looking
When mortgage rates rise, the natural reaction can be to postpone buying and wait for rates to come back down.
For some people, waiting will absolutely be the right decision.
But the mortgage rate is only one part of the overall cost of buying a property.
If higher rates reduce competition between buyers and create greater negotiating power, the price you pay for the property can become equally important.
For example, imagine a London property originally marketed for £700,000.
If weaker demand allows a buyer to negotiate the purchase price down to £675,000, that’s a £25,000 reduction in the acquisition price.
Whether that compensates for a higher mortgage rate depends on the deposit, mortgage size, product, fees, mortgage term and how long the borrower keeps that mortgage.
The point isn’t that buyers should ignore rising rates.
It’s that mortgage rates and property prices shouldn’t be considered in isolation.
For buyers who are financially ready, a slower market can sometimes create opportunities that weren’t available when borrowing was cheaper and competition for properties was stronger.
What Do Rising Rates Mean for First-Time Buyers?
First-time buyers with smaller deposits continue to face some of the highest mortgage rates.
Rightmove’s latest averages show:
- 95% LTV two-year fixed: 6.06%
- 95% LTV five-year fixed: 6.02%
- 90% LTV two-year fixed: 5.68%
- 90% LTV five-year fixed: 5.63%
However, averages don’t tell you what an individual borrower can actually obtain.
Your income, deposit, credit profile, existing financial commitments, property and lender criteria can all influence the mortgages available.
Some lenders may also offer substantially different affordability calculations for the same borrower.
This is why establishing your realistic mortgage budget before searching for a property becomes particularly important when rates are moving quickly.
What Does This Mean for People Remortgaging?
Homeowners approaching the end of a fixed deal face a different challenge.
Waiting for rates to fall can be tempting, but delaying your mortgage review until your existing deal is about to expire can leave you with fewer options.
Depending on the lender, it may be possible to secure a new mortgage product several months before your existing deal ends.
If rates subsequently improve, there may also be opportunities to review the product again before completion, subject to lender criteria and timescales.
Borrowers should compare:
- Product-transfer options from their existing lender.
- Remortgage options with other lenders.
- Product fees as well as headline interest rates.
- Early repayment charges on the existing mortgage.
- Affordability requirements if moving to another lender.
- Whether their income or circumstances have changed since their previous application.
The lowest advertised mortgage rate isn’t necessarily the cheapest or most suitable option once fees and individual circumstances are considered.
Is Your Mortgage Deal Ending Soon?
With lenders repricing mortgages quickly, reviewing your options early can give you more time to compare your existing lender with alternatives across the market.
At Oportfolio, we can assess your current mortgage, income and circumstances and help you understand the options available before your existing deal ends.
Should I Fix My Mortgage Now or Wait for Rates to Fall?
There is no single answer that will be right for every borrower.
Nobody can reliably guarantee where fixed mortgage rates will be in three or six months.
If you’re buying now, the question should be whether the mortgage and property are affordable based on today’s figures – rather than whether you can successfully predict future interest rates.
If you’re remortgaging, reviewing the market early can give you more time to understand your options.
Securing a mortgage doesn’t always mean you must stop monitoring the market either. Depending on the lender and stage of the application, it may be possible to move onto a more competitive product if one becomes available before completion.
What Should Mortgage Borrowers Watch Next?
The next few weeks could be particularly important for the UK mortgage market.
Borrowers should watch:
Mortgage lender repricing: Further increases or reductions will show how lenders are responding to funding costs and competition.
Inflation: Inflation remains an important influence on expectations for future interest rates.
The property market: Falling sales volumes could give buyers greater negotiating power, particularly in slower markets such as London.
The Autumn Budget: Fiscal announcements can affect financial-market expectations and, indirectly, mortgage pricing.
The Bank of England: The next scheduled Bank Rate decision is on the 5th of November 2026.
Trying to predict each of these developments perfectly is extremely difficult.
For most borrowers, the more useful approach is to understand what they can afford now, secure an appropriate option when necessary and keep the market under review.
In Summary
The first week of October has reinforced a trend we’ve been watching throughout recent mortgage market updates.
Mortgage rates are continuing to rise, and higher borrowing costs are now increasingly visible in buyer behaviour.
Mortgage approvals have fallen, sales activity has weakened and house price growth is slowing.
For borrowers, however, this isn’t simply a story of bad news.
A slower property market can create more choice and potentially greater negotiating power, particularly in London.
The challenge is working out whether the mortgage, deposit, property price and monthly repayments make sense together.
Rather than trying to perfectly time the mortgage market, buyers and homeowners may benefit from understanding the options available to them now and keeping those options under review as the market changes.
Buying or Remortgaging While Mortgage Rates Are Rising?
At Oportfolio Mortgages, we help clients understand how changing mortgage rates affect what they can realistically borrow and which lenders could be appropriate for their circumstances.
We regularly work with first-time buyers, home movers, professionals, self-employed borrowers and clients requiring larger or more complex mortgages across London and the UK.
If you’re buying a property or your existing mortgage deal is coming to an end, we can review the options currently available and help you understand how the latest market changes could affect your mortgage.
