Mortgage rates have increased over the last month as lenders grappled with the prospect of base interest remaining higher for longer.
According to Moneyfacts, average rates on both five and two-year fixed mortgages climbed between April and May after having fallen in the past six months.
A typical two-year mortgage now includes interest of 5.91%, against 5.80% a month ago, the group said.
At the same time, rates on five-year fixes have increased from 5.39% to 5.48%.
“Borrowers may be disappointed to see fixed mortgage rates are on the rise,” Moneyfacts finance expert Rachel Springall commented.
“The mortgage market continues to be fluid despite no change to the Bank of England base rate since August 2023, and market forecasts have pushed back imminent cuts, due to stubborn inflation.”
The base interest was held at 5.25% by the Bank of England on Thursday, though governor Andrew Bailey hinted at cuts over the coming months that may be deeper than forecast.
“With the progress we’ve made, to make sure that inflation stays around the 2% target [...] it is likely that we will need to cut Bank Rate over the coming quarters,” he said.
Monetary policy will now be “less restrictive,” he added, “possibly more so than currently priced into the markets”.
Though mortgage rates have increased most recently, Moneyfacts noted deals were cheaper than they had been six months ago, with two-year fixes having been at 6.29% and five-year counterparts at 5.86% in November.