The average five-year fixed mortgage rate has hit 6% for the first time in around three years, according to Moneyfacts data highlighted by the BBC.
But analysts at Shore Capital, the stockbroker, say the headline number flatters to deceive.
The 6% figure reflects a simple average across all products, including higher loan-to-value (LTV) and weaker-credit propositions, rather than the rates available to mainstream prime borrowers.
Rightmove, which covers around 95% of the mortgage market, currently quotes an average five-year fixed rate of 5.53%, with the lowest rate sitting at 4.98% for products carrying a fee of around £999.
ShoreCap analyst Gary Greenwood notes that no major bank is currently pricing above 5.9%, and that borrowers with lower LTVs are likely to pay materially less than the Moneyfacts headline suggests.
Lloyds Banking Group, for example, quotes a five-year rate for a home mover at 75% LTV of 5.29% plus a £999 fee.
Completion spreads tell a similar story. Lloyds has been quoting new-business completion spreads, the margin above swap rates at which mortgages are priced, of around 70 basis points (bps).
Against five-year swap rates of around 4.7%, that implies mortgage pricing of around 5.4%, broadly in line with the Rightmove average rather than the 6% figure making headlines.
The distribution channel also matters, with directly originated mortgages typically priced more keenly than broker-arranged business, given the additional intermediary cost involved in the latter.
ShoreCap concludes that mortgage rates have undeniably moved higher, creating a genuine affordability headwind for borrowers.
However, the 6% average overstates the rate being paid by mainstream borrowers, particularly those at lower LTVs.
For the major banks, the more relevant picture is new-business rates in the mid-5% area, though pricing will vary materially by LTV, borrower profile and distribution channel.
Shore has a 'sell' rating on Lloyds Banking Group.
